Report of Poverty Status in Jordan

Department of Statistics Poverty Statistic Division

“Based on the Household Expenditures & Income Survey data 2008”

Department of Statistics

July 2010

Department of Statistics Poverty Statistic Division

Introduction The drafting of this report is part of the Jordanian government’s efforts to measure and monitor poverty in Jordan and the characteristics of poor household and individuals at the Kingdom and governorate levels, to enable the government agencies and policy makers to assess poverty alleviation plans and programs. The importance of this report lies in the methodology adopted and the results reached, specifically the measurement and analysis of the effect on poverty of direct government intervention and measures targeting households during 2008. Its importance also lies in its reliance on the data of the Household Expenditure and Income Survey – 2008 with a large sample size of the Jordanian household. The sample consisted of about 13 thousand households representing all regions of Jordan, at the sub district level, according to the administrative divisions. This report also conducted a time comparison on the evolvement of poverty indicators in constant prices.

This report was drafted according to the international methodologies followed by the Department of Statistics (DoS). It is noteworthy that the Department of Statistics (DoS) sought to institutionalize the work related to measuring poverty and targeting the poor through establishing a Poverty Statistics Division in July 2009. The Division will be a nucleus for building national capacities in measuring poverty and acquiring the necessary expertise for such a sensitive topic, as well as a source for decision makers and policy makers to create poverty alleviation programs and plans. This is also the first report prepared with national effort and expertise at the Jordanian and regional levels.

The report highlighted a number of issues that represent fertile areas for researchers, students and developers to study the detailed issues of household expenditure and income aspects, as well as the social and other characteristics and the changes to the state of poverty throughout the various periods. The report has three chapters. The first addresses the methodology of measuring poverty at the level of the Kingdom and governorates, and identifying pockets of poverty. The second chapter of the report addresses the analytical aspect of the Household Expenditure and Income Survey at the quintiles level (low expenditure and high expenditure) as well as the analysis of the social aspects of the Jordanian household based on the data provided by the survey. The third chapter covers the effect of cash transfers and government interventions on poverty and the role played by the government in curbing it in 2008.

This report sets the planners and developers at the government entities and all researchers and specialists before a new phase to continue building on the previous accomplishments and continue ongoing developmental efforts to address poverty and minimize it, as the report highlighted percentages and numbers of the poor in the governorates. The government is also seeking to reduce the developmental variance between the governorates through upgrading and developing a number of programs, projects and activities listed in the initiatives of the National Agenda Implementation Programs, which are the general institutional framework for the government’s work in this area.

The Department of Statistics (DoS) is seeking to publish a similar report in 2011, after completing the 2010 Household Expenditure and Income Survey. It is also seeking to expand poverty measurement tools to include new methodologies and sources of data. Finally, the Department of Statistics calls on the researchers and stakeholders to expand the analysis included in the report, noting that the data is available at the (DoS) for those interested in carrying out additional analysis.

Department of Statistics Poverty Statistic Division

Gratitude and Appreciation

This report represents the outcome of loyal national efforts that started with the execution of the Household Expenditure and Income Survey over two years. It was followed by the drafting of the initial report on the survey, and the initial statistical report of the poverty indicators, followed by the drafting of this report over 90 days of work, and the preceding processes of preparation, discussion and analysis that led to producing this national work in record time. Work on drafting this report started on the recommendation of the Ministerial Committee for Human Development to form a higher steering committee to supervise the preparation of this report, chaired by the Director General of Statistics. The committee also included among its members the Secretary General of the Ministry of Social Development, the Secretary General of the Ministry of Planning and International Cooperation, the Secretary General of the Social Solidarity Coordination Commission and the Director General of the National Aid Fund. The Minister of Planning and International Cooperation and the Minister of Social Development along with a number of technical experts from these bodies supervised it. The committee outlined the general contents of the report as well the work timeframe. A national team was then formed to outline the report’s general framework, in addition to a micro technical team consisting of Mr. Kamal Saleh, Abd El-Fattah Jaradat, Khaled Suboh, Mohammad Abdul Razzaq, Safwat Radaydeh, Maha Dawas, Buthaina Alawneh from the Department of Statistics, Dr. Maher Mahrouq, Dr. Hadram Al Fayez and Mutasem Al Kilani from the Ministry of Planning and International cooperation, was formed to oversee the drafting of this report in its final form.

Thus, the (DoS) expresses its gratitude and appreciation to all those who contributed to this national work from all entities, for their efforts in preparing this report in its current form. The (DoS) also extends its gratitude to all the citizens whose cooperation in providing their data had the greatest effect in ensuring the success of this blessed national effort.

Dr. Haidar Freihat

Director General of Statistics

Department of Statistics Poverty Statistic Division

Executive Summary

This report contains an expanded and comprehensive analysis of poverty indicators based on the Household Expenditure and Income Survey - 2008, executed by the Department of Statistics through four field rounds that lasted for one year. The survey work ended with the end of the first quarter of 2009. Two earlier reports were drafted, based on the data of this survey: The first was a presentation of the main results of the survey and the other addressed measuring poverty indicators using the methodology of calories adopted by the World Bank and comparing it through time at constant prices. Consequently, this analytical report on the state of poverty in Jordan was drafted, with the participation of a number of national entities with national efforts and expertise involved in poverty issues.

The analysis shows that the poverty incidence in 2008 reached 13.3% (Base year: 2006). It is the percentage of individuals whose expenditure is less than the average general poverty line in the Kingdom. The absolute poverty line (food and non-food) was JD.680 per individual per year (i.e. JD.57 per individual per month). At the standard household level, the poverty line was JD.3,876 per year (i.e. JD.323 per household per month). The abject poverty line (food poverty line) for a household of 5.7 persons was JD.138.7 per household per month, with the food poverty line reaching JD.292 per person per year (i.e. JD.24.3 per person per month). It is noteworthy that considering the person poor or not according to this methodology relates to the poverty line of his household at his usual place of residence. As for the percentage of abject poverty, it reached less than one percentage point. The number of population below the abject poverty line in 2008 was about 15 thousand (i.e. about 1.9% of the total poor in the Kingdom, or about a quarter point of a percentage point of the total population of the Kingdom), while in 2006 they were about 32 thousand persons (i.e. 4.5% of the total number of poor in the Kingdom or about 0.6 percentage points of the total Kingdom’s population). This means that Jordan achieved the first goal of the Millennium Development Goals related to eradicating hunger seven years earlier than due (as the target value is 3.3% by 2015).

At the governorate level, the rate of poverty incidence varied from one governorate to another. The highest percentage of poverty was recorded in the governorates of Mafraq at 31.9%, followed by Maan: 24.2% and Tafileh: 21.1%, while the lowest recorded poverty rates were in the capital at 8.3%, followed by Zarqa: 11.2% and Aqaba: 11.8%. The report also identifies poverty pockets (the sub-districts where the percentage of individuals below the absolute poverty line exceeds 25% of the total population of the sub-district). These totaled 32 pockets compared with 22 in 2006. The report stated that 18 sub-districts continued as poverty pockets, while 4 were no longer among the poverty pockets. These are Um Al Rasas, Kufranja, Orjan and Mujeb. 14 new sub-districts were classified as poverty pockets. These are Um Al Jmal, Azraq, Shouneh Janoubiyeh, Um Al Quttain, Huseiniyeh, Sahab, Arhab, Athruh, Qasabat al Mafraq, Muwaqar, Areed, Dleil, Teibeh and Ein Al Basha. It is noteworthy that the ongoing, new and old pockets are distributed among the governorates and regions of the Kingdom and are not restricted to a specific region or governorate.

Although the number of pockets increased by 14 new pockets (i.e. an increase of 44% of the total number of pockets), the percentage of the poor in these pockets constituted only 17.5% of the total number of

Department of Statistics Poverty Statistic Division poor in the Kingdom (or 136 thousand out of 781 thousand people). The combined percentage of poor in these new pockets constituted 29% of its population, which is a percentage close to the standard limit (25%). This indicates that the direct and indirect development interventions may have sufficient flexibility to take these sub-districts out of poverty pockets, especially since the population of these pockets does not exceed 8% of the total population of the Kingdom. It is noteworthy that the number of poor in 2006 totaled about 706 thousand who constituted 13% of the population then, i.e. less than their 2008 figure by about 75 thousand poor. In spite of the increasing number of poverty pockets in 2008 compared with their number in 2006, the poverty rate did not significantly rise. This is due to the improvement in the living conditions of the people in Jordan in all aspects of life because of the distribution of developmental gains among all areas without exception, in spite of their concentration in some areas.

In terms of the distribution of the number of poor, the report indicates that about 57% of the total poor in the Kingdom (781 thousand under the poverty line), are located in the more populated governorates, these are the capital, Irbid and Zarqa. This is in spite of the low percentage of poverty in those governorates in terms of their total population. Moreover, about 33.5% of the total poor in the Kingdom, or about 263 thousand, reside in the sub-districts of the poverty pockets.

As for the household expenditure, the average expenditure in 2008 on food items in real prices has decreased by 2.6% compared with 2006, and decreased by 8.2% for non-food items. The group of meat and chicken ranked first in expenditure, with the average household expenditure on this group about JD.614 , followed by the tobacco and cigarette group, with an average expenditure on it of JD.305.6 (i.e. about JD.0.84 per day). The household expenditure on this group exceeds its expenditure on the group of oils and fats or the group fruits and vegetables. As the number of households in the Kingdom is about 1.1 million, then the total household expenditure on tobacco and cigarettes is about JD.336 million annually for the Kingdom. This exceeds the household expenditure on dairy products and eggs group, two folds the household spending on the oils and fats group, and half of the household expenditure on the meat and chicken group.

The analysis showed that the average real annual income was JD.6,166 for the standard Jordanian household with 5.7 members, a decrease of 0.9% compared with 2006, which was then JD.6,220. In detail, the average household income from employment in 2008 was 2.1% higher than in 2006, and the average income of the self-employed rose by 8.2% compared with 2006, while the value of transferred income decreased in 2008 by 4.9% compared with its value in 2006. The income from rent also decreased by 9% compared with 2006.

The analysis revealed a slight improvement in the equity of income distribution in Jordan, as reflected by the decrease in the Gini coefficient by 1.5% between 2006 and 2008 from 0.399 to 0.393. The Gini coefficient reflects the equity of income distribution. Equity is larger the closer it becomes to zero.

On the other hand, the data available showed a rise in poorest population segment’s share (first quintile) of the total income of the Kingdom from 7.7% in 2006 to 11.2% in 2008. This means that the population categories with least expenditure (the poorest) improved their economic circumstances at fixed prices of 2006. This means that the prices and economic developments during the subject research period did not make the poor poorer. On the contrary, the economic developments and the financial and social policies followed by the government in 2008 were in the interest of the more poor groups.

Department of Statistics Poverty Statistic Division

In terms of social characteristics, the results showed an increase in the average family size of the poor, with 7.6% members compared with 4.2% among the rich. The young in the poorest segment constituted 48% of the total population, while they constituted about 20% only of the population in the rich quintile. This indicates a rise in the rates of birth and dependency in the poorest quintile and a decrease in the richest quintile. The results also indicated a decrease in the percentage of old people (seniors) in the poor quintile (3.7%, compared with 14.2% in the rich quintile).

The percentage of illiterate and acquainted (read and write) in the poorest quintile rises compared with the richest quintile (about 58% against 41%) consecutively. The percentage of holders of higher educational qualifications rises in the richest quintile compared with the other segments, especially the poorest group. Their percentage was more than five times that in the poorest quintile (34% for the richest quintile compared with 6% for the poorest quintile). The unemployed constituted about 15% of the work force in the rich quintile while their percentage constituted 27% among the poor quintile. The percentage of employers in the rich quintile rises significantly compared with the other groups, especially the poorest (8.4% for the richest quintile and 0.8% for the poorest quintile). The household heads working in the private sector from the richest quintile constituted one fourth of the total household heads working in the private sector compared with 14.5% of the working household heads in the poorest group.

The report contains an analysis of the effect of direct government intervention at current prices during 2008 on alleviating poverty. It was found that if the National Aid Fund transfers were excluded from the total household income and expenditure, then the percentage of poverty would have reached 13.9% (instead of the actual poverty rate of 13.3%). When ignoring assistance from other government bodies (National Aid Fund, other government entities, government assistance through the Zakat Fund and the other transfers), then the percentage of poverty would have reached 16.4%. It was also found that by ignoring all forms of direct government assistance from household income and expenditure (National Aid Fund, other government entities, increases of salaries to employees and military pensioners in the public sector, the Hashemite charity parcels, and the values of cash and in-kind assistance provided by the Ministry of Awqaf and Islamic Affairs / the Zakat Fund and the other government transfers) and others, the poverty rate would have reached 21%. Thus, the total government interventions have tangibly contributed to curbing the rise in poverty rates (thus reducing the poverty rate from 21% to 13.3%, and the number of population below the poverty line from 1.24 million to 781 thousand).

It was also noted that the effect of eliminating all forms of government intervention and support varied with the variance in the level of expenditure by the five population categories addressed by the report. It was noted that the categories most benefitting from government intervention is the quintile within the population categories with least expenditure (first quintile).

Finally, the Department of Statistics invites all interested parties and researchers to conduct additional specialized and comprehensive research on the structural changes in the patterns of expenditure of the Jordanian household and individuals and the pockets of poverty. The aim should be to identify the various needs of the Jordanian individuals and households, which will help in drafting of development programs and directing them effectively and efficiently, taking into consideration that the Household Expenditure and Income Survey is a survey by sample. Consequently, there is a need for more specialized and in- depth studies by the specialized bodies on the reality of poverty and its dimensions.

Department of Statistics Poverty Statistic Division

Table of Contents Report of Poverty Status in Jordan ...... 1 “Based on the Household Expenditures & Income Survey data 2008” ...... 1 Introduction ...... 3 Gratitude and Appreciation ...... 5 Executive Summary ...... 7 Table of Figures ...... 15 Chapter One: Methodologies and Results...... 17 1.1 Overview of Jordanian Economy during the Survey Period ...... 17 Economic Growth: ...... 17 Inflation Rate: ...... 17 Unemployment: ...... 17 Foreign Trade: ...... 17 Public Finance: ...... 18 1.2 Measuring Poverty depending on the Household Expenditure and Income Survey Data ...... 18 1.2.1 History of Measuring Poverty in Jordan...... 19 1.2.2 Stages of Measuring Poverty ...... 20 1.2.3 Calculating Main Poverty Indicators for 2008 ...... 21 1.2.4 Poverty Pockets in 2008 ...... 34 Chapter Two: ...... 38 Analytical Framework ...... 38 2.1 Analysis of Household Expenditure and Income 2006-2008 ...... 38 2.1.1 Analysis of Household Expenditure ...... 38 2.1.2 Household Income Analysis for 2006-2008 based on 2006 (Real Prices) ...... 48 2.1.4 Social Analysis ...... 65 Chapter Three:...... 75 Role of Government Interventions in Poverty Alleviation ...... 75 Introduction ...... 75 3.1 Analysis of the Effect of Excluding Transfers and Government Support on Poverty Levels in the Kingdom ...... 75

Department of Statistics Poverty Statistic Division

Annex ...... 83

Department of Statistics Poverty Statistic Division

Tables Index Table 1: Timeline for Measuring Poverty ...... 21 Table 2: Average Weight of Jordanians by Age ...... 22 Table 3: Daily Calorie Requirement of Jordanians by Age and Gender ...... 22 Table 4: Average Daily Consumption of Calories by Individuals and their Annual Expenditure on Food in Real Prices and According to Quintiles for 2008 ...... 23 Table 5: Average Calorie Cost (in JD) in Real Prices According to Household Expenditure Quintiles in 2006 and 2008 ...... 23 Table 6: Average Requirement of Calories of the Jordanian Individual and the Actual Calories Taken in 2006 and 2008 ...... 23 Table 7: Consumer Price Index (Food and non-Food) for the Governorates for the Base Year 2006 ...... 24 Table 8: Value of Abject, non-Food and Absolute Poverty Line for the Individual per Year in Actual Prices by Governorate 2008 (JD)...... 28 Table 9: Poverty Ratio (Individuals) by Governorate 2008 ...... 29 Table 10: Poverty Gap Ratio by Governorate 2006 and 2008 ...... 31 Table 11: Severity of Poverty Indicator by Governorate 2006 and 2008 ...... 32 Table 12: Poverty Indicators Summary ...... 33 Table 13: Distribution of Number and Percentage of Poor by Governorate for 2008 ...... 34 Table 14: Poverty Ratio, Population and Number of Poor in Poverty Pockets for 2008 by Administrative Division ...... 36 Table 15: Poverty Pockets in 2006 ...... 37 Table 16: Average Household Expenditure on Food Items for 2006 and 2008 in JD ...... 40 Table 17: Average household expenditure on non-Food Items for 2006 and 2008 in JD ...... 42 Table 18: Relative Importance of Household expenditure on Food Items According to Expenditure Quintiles for 2006 and 2008 (%) ...... 44 Table 19: Relative Importance of Household Expenditure on non-Food Items According to Expenditure Quintiles in Real Prices for 2008 (%) ...... 46 Table 20: Average Growth in Household Expenditure in Real Prices for 2006 and 2008 (%)...... 48 Table 21: Household Income in Real Terms in 2008 (2006=100) ...... 49 Table 22: Average Household Income by Source of Income by Quintiles in 2006 ...... 50 Table 23: Average Household Income by Source of Income by Quintiles in 2008 ...... 50 Table 24: Relative Distribution of Individuals by Income Quintiles in 2008 ...... 58 Table 25: Relative Distribution of Individuals by Gender and Expenditure Quintiles ...... 65 Table 26: Relative Distribution of Individuals by Age Composition and Expenditure Quintiles ...... 65 Table 27: Relative Distribution of Heads of Households by Marital Status and Expenditure Quintiles .... 66 Table 28: Head of Household Gender by Quintiles for 2008 ...... 66 Table 29: Relative Distribution of Individuals (15 years or more) by Gender, Educational Level and Expenditure Quintiles ...... 67 Table 30: Average Household Size and Expenditure Quintiles ...... 68 Table 31: Relative Distribution of Individuals by Academic Status and Expenditure Quintiles ...... 68 Table 32: Relative Distribution of Working Individuals by Economic Activity and Expenditure Quintiles ...... 68

Department of Statistics Poverty Statistic Division

Table 33: Relative Distribution of Working Household Heads by Household Head’s Work Sector and Expenditure Quintiles ...... 69 Table 34: Relative Distribution of Working Heads of Households by Quintiles and Work Sector 2008.. 69 Table 35: Relative Distribution of Household by Type of the Housing Unit and Expenditure Quintiles .. 70 Table 36: Relative Distribution of Household by Type of the Housing Unit Ownership and Expenditure Quintiles...... 70 Table 37: Relative Distribution of Household by Main Source of Heating and Expenditure Quintiles ..... 71 Table 38: Relative Distribution of Household by Cost of Durable Goods and Expenditure Quintiles 2008 ...... 72 Table 39: Relative Distribution of the Population by Poverty Quintiles and Age Group 2008 ...... 72 Table 40: Relative Distribution of Poor and non-Poor Individuals ...... 73 Table 41: Relative Distribution of Poor and non-Poor Household Heads by Marital Status 2008 ...... 73 Table 42: Relative Distribution of Poor and non-Poor Household Heads by Work Status 2008 ...... 73 Table 43: Percentage of Poor and non-Poor Working Individuals 2008 ...... 73 Table 44: Changes in Expenditure by Scenario ...... 79 Table 45: Summary of the Effect of Direct Government Interventions in Reducing Poverty Rates by Scenarios ...... 81 Table 46: Poverty Incidence in2008 at Governorate level ...... 83 Table 47:poverty Incidence in 2008 at sub district level (2006=100) ...... 83 Table 48:poverty pockets get out from 2006 pockets ...... 85 Table 49: new poverty pockets 2008 (first time) ...... 86 Table 50: continue poverty pockets between 2006 1nd 2008 (2006=100) ...... 86 Table 51: poverty pockets in 2006 ...... 87

Department of Statistics Poverty Statistic Division

Table of Figures Figure 1: Food Poverty Line (Extreme Poverty) Per Individual per Year by Governorate 2008 ...... 25 Figure 2: Absolute Poverty Line (Food and non-Food) by Governorate 2008 ...... 26 Figure 3: Non-Food Poverty Line by Governorate 2008 ...... 27 Figure 4: Percentage of Poverty by Governorate 2008...... 29 Figure 5: Relative Distribution of the Poor by Governorate 2008 ...... 30 Figure 6: Percentage Gap Rate by Governorate 2008 ...... 31 Figure 7 : severity of poverty ratio 2008 ...... 32 Figure 8: Poverty Pockets in 2008 ...... 35 Figure 9: Relative Distribution of Household Income by Source 2008...... 49 Figure 10: Average Household Income by Governorate 2006, 2008 ...... 50 Figure 11: Income Resources by Poor and Rich Quintile ...... 51 Figure 12: Average Household Income Growth by Quintiles between 2006 and 2008 ...... 52 Figure 13: Average Annual Household Income in 2006 and 2008 ...... 52 Figure 14: Average Household Income Growth from Employment between 2006 and 2008 ...... 53 Figure 15: Average Household Income from Employment in 2006 and 2008 ...... 53 Figure 16: Average Income Growth for Self-Employed between 2006 and 2008 ...... 54 Figure 17: Average Rate of Rent Income Growth between 2006 and 2008 ...... 55 Figure 18: Average of Property Income Growth between 2006 and 2008 ...... 56 Figure 19: Average Income Growth from Transfers between 2006 and 2008 ...... 58 Figure 20: Average Annual Household Income and Expenditure for 2008 in JD ...... 59 Figure 21: Trend of the General Price Index and Price Index for Some commodity Groups for 2008 ...... 61 Figure 22: Average Jordanian Household Expenditure on Various Food Groups for 2006 and 2008 ...... 62 Figure 23: Relative Importance of Household Expenditure on Food Items for 2006 and 2008 ...... 63 Figure 24: Figure 24: Relative Importance of Expenditure on Food Items by Population Quintile (%) ..... 64 Figure 25: Relative Importance of Expenditure on non-Food Items by Population Quintiles (%) ...... 64 Figure 26: Percentage of Change in Average Household Expenditure as a Result of Excluding Various Social Quintiles by the Aid Fund in 2008 ...... 77 Figure 27: Percentage of Change in Average Expenditure of the Household as a Result of Excluding all Government Transfers and National Aid Fund Transfers ...... 78 Figure 28: Change in Average Household Expenditure for Various Quintiles for 2008 as per the Third Scenario (%)...... 80 Figure 29: Percentage of Change in Average Jordanian Household Expenditure for 2008...... 81 Figure 30: Actual Percentage of Poverty for 2006 and 2008 and the Hypothetical Percentages according to the Three Scenarios for 2008 ...... 82

Department of Statistics Poverty Statistic Division

Chapter One: Methodologies and Results

1.1 Overview of Jordanian Economy during the Survey Period

Economic Growth: The GDP recorded a growth at constant prices in 2007 and 2008 by 8.8% and 7.6% consecutively, exceeding the targeted rate of 6% for those years. The real economic growth rate recorded for 2008 was supported by growth in the following sectors: agriculture, mining and quarrying, construction, wholesale and retail, hotels and restaurants, and financial services, insurance and real estate. The growth rates for those sectors were 0.1%, 35.8%, 13.3%, 9.9% and 8.3%, compared with their growth by 0.5%, 9.2%, 5.4%, 7% and 8.3% in 2007 consecutively. While the slowdown in the real economic growth rate in 2008 was represented by slowdown in the growth rates of the following sectors: "manufacturing", "transport, storage and communications", "social and personal services", "government service producers" and "the net taxes on products ". These were 5.1%, 5.8%, 9.5%, 4.1%, and 10.1% compared with 9.2%, 9.3%, 15.0%, 3.1% and 15.4% consecutively in 2007. Due to the economic growth, the average of per capita share of the GDP has risen, in current prices, by 25.1% to reach JD.2753.5 or US$.3887.9. As for the constant prices, this indicator rose by 5.3% in 2008 to reach JD.1589.4 or US$.2244.3.

Inflation Rate: The inflation rate measured by the relative change in the consumer prices index reached 13.9% in 2008 compared with 4.7% in 2007. This is due to a number of local factors on one hand and the external factors and influences on the other. Among the local factors, the inflation rate was affected by liberalizing the prices of most oil derivatives and imposing the special tax on some of these derivatives, and the consequent effects on the other sectors. As for the external factors, the rising international oil prices affected the production costs of local industries, as well as the rise in basic food item prices, which rose by 18.4% in 2008. Therefore, the rise in the 2008 inflation rate was the result of the increase in food group prices, the rise in the housing group prices by 13.5%, and the rise in the group of clothing and shoes by 7.4% as well as the rise in the group of other goods and services by 9.8%.

Unemployment: The unemployment rate reached 12.7% by the end of 2008, retreating from its value in 2007, which was 13.1%. The unemployment rate among males was 9.8% compared with 22.1% among females in 2008. The crude economic participation rate (work force attributed to the total population) reached 25%, while the rate of refined economic participation (work force attributed to population 15 years of age or more) was 64% for males and 13.8% for females.

Foreign Trade: The total foreign trade indicator (national exports + re-exports + imports) rose in 2008 by JD.3586 million or 27.7% compared with 2007, amounting to about JD.16.5 billion compared with JD.13.0 billion in 2007. This increase was a result of the increase in national exports by 39.2% and imports by 24.0%.

As for the most outstanding developments in the foreign trade sector during 2008 compared with 2007, the national exports increased by JD.1247.3 million in current prices during 2008 (equal to 39.2%). Clothing constituted the most important exported items during 2008 at a value of JD.716.7 million or 16.2% of the value of national exports during the same period, while they constituted 26.5% during the same period of 2007. This was followed by raw potash at a value of JD.545.3 million or 12.3%. The chemical fertilizer exports came in third rank with JD.421.5 million or 9.5% of the value of national exports. Raw phosphate came in fourth place with a value of JD.371.9 million or 8.4%. In terms of the geographic distribution of national exports, it is noted that the Greater Arab Free Trade Zone made up 41.7% of the total national exports, especially to the Iraqi market, which made up 31.1% of the total exports.

Department of Statistics Poverty Statistic Division

With regard to re-exported goods in 2008, they totaled about JD.1201.9 million, an increase of JD.322.0 million or 36.5% compared with 2007. This increase was centered on a number of goods, namely "cars, tractors and motorcycles" and "machines and tools", increasing by JD.80.8 million and JD.51 million consecutively. Based on the above, the value of total exports (national exports + re-exports) increased during 2008 by JD.1569.4 million or 38.6% compared with 2007, to reach JD.5633.0 million.

As for imports, their value increased during 2008 by JD.2338.7 million or 24.1% to reach JD.12060.9 million in current prices compared with JD.9722.2 million in 2007. Crude oil constituted the most important imported item in 2008, ranking first with a value of JD.1857.9 million or 15.4% of the total imports. Machines, equipment, tools and their parts came in second place with JD.917.5 million or 7.6% of the total imports. Iron and steel came in third place with JD.609.1 million or 5.1%. With regard to the geographic distribution of imports, the Greater Arab Free Trade Zone made up 33.2% of the total imports, especially Saudi Arabia, which made up 63.7% of the total value of our imports from that Zone.

As a result of the above, the trade balance deficit of the Kingdom for 2008 rose to JD.6427.9 million, thus registering an increase of JD.769.3 million or 13.6% compared with 2007. It is noteworthy in this respect that the deficit in the current account of the balance of payments during 2008 reached JD.1653.8 million or 11.0% of the GDP, compared with JD.2080.1 million during 2007 or 17.3% of the GDP during 2007. However, foreign investments in Jordan saw a growth of 8% during 2008, to reach JD.2005.7 million. The transfers of workers in 2008 registered a growth of about 7% compared with 2007, reaching to JD.2242 million.

Public Finance: The state general budget recorded a deficit of 7% before calculating aid and 2.2% after aid in 2008. The value of aid in that year totaled JD.718.3 million, registering a growth of 109% compared with 2007. The general debt retreated in 2008 compared with 2007. In 2007, its percentage was 68%, but retreated to 56.8% in 2008 due to the government’s purchase of about US$.2.1 billion of its external debt to the Paris Club creditors in the first half of 2008. This is in line with the requirements of the public debt law, stipulating that the general debt should not exceed 60% of the GDP. 1.2 Measuring Poverty depending on the Household Expenditure and Income Survey Data Poverty is a complex phenomenon with diverse economic and social dimensions. The concept of poverty differs according to countries, cultures and times. However, it is agreed that poverty is simply the inability to provide the minimum socially required and desired standard of living. It is the state of financial denial, whose features include low consumption of food in terms of quality and quantity, poor health, low educational level and housing circumstances, denial of the ability to purchase durable goods and other financial assets, and lack of reserve or security to face difficult cases such as illness, handicap, unemployment, disasters and crises1.

Poverty in its general concept is the inability of the person to provide the necessary income to meet the basic needs (food, shelter, clothing, education, health and transport), which enable the individual to perform work in an acceptable manner2.

1 Baker, Mohammad Hussein (1996), Economic and Social Committee for West Asia, Measuring Poverty in Economic and Social Committee of West Asia Countries, Series of Poverty Alleviation Studies (3). New York: United Nations, 1996, p. 1. 2 Al Sqour et al., 1989, p. 17 (Pockets of Poverty in the Hashemite Kingdom of Jordan Study).

Department of Statistics Poverty Statistic Division

For the purposes of this report, poverty will be defined as the person’s inability to meet the minimum basic needs that guarantee a decent life. The basic needs include: food, clothing, housing, health care, education and transportation. These are the basic needs for the individual to remain alive, maintain his human dignity, and enable him to practice his normal activity in harmony with the customs and traditions, and living patterns prevalent in the community. The methodology of measuring poverty followed and adopted in Jordan is the methodology of meeting calorie needs to measure the poverty line, and the ensuing calculation of the various indicators. The Household Expenditure and Income Survey is the ideal survey and the main source for measuring poverty indicators.

If the definition of poverty is important, then measuring it is no less important, so that poverty alleviation policy makers can identify the priorities and necessary programs to implement these policies and consequently guarantee that these programs are accessible by those who deserve them – i.e. targeting the poor. It is necessary for poverty studies to identify who are the poor, their location, their relative size and the depth and severity of suffering from poverty. This requires poverty criteria and measurement tools on the basis of which the poor are diagnosed, the size of poverty is measured, and the basic characteristics of the poor are identified, in addition to their geographic distribution, their demographic characteristics, their educational levels, their economic activities, and their housing, health and food circumstances.

1.2.1 History of Measuring Poverty in Jordan The first official study for measuring poverty in Jordan dates back to 19733, and a study in 1987 titled “Study of the Poverty Pockets in the Hashemite Kingdom of Jordan”4. This study calculated the poverty line of a model household pursuant to the standard food basket. In light of this, the percentages of absolutely and abjectly poor household were identified, in addition to calculating the other poverty indicators. In the years 1994 and 2001, the World Bank experts upgraded the poverty lines for 1987 based on the consumer price index. A study on poverty was also prepared and implemented by World Bank experts in cooperation with a national team formed for this purpose from various ministries and public institutions during 2004 after publishing the Household Expenditure and Income Survey 2002/2003 results. This was implemented on a sample of 12,792 representative households at the sub-district level. The study calculated the poverty lines and indicators, including rates and gaps. A detailed report was drafted with the results of the poverty calculations, linking them to several demographic, health, social and economic characteristics of the poor.

To monitor the changes to the living and consumption patterns of the Jordanian household, the poverty indicators were updated in 2006 based on the Household Expenditure and Income Survey implemented in the second half of 2006 on a sample of 12,768 representative households at the Kingdom’s level. The goal was to update the poverty lines and indicators calculated earlier based on the 2002/2003 survey data.

Towards the end of 2007, the Department of Statistics, prepared for the implementation of the Household Expenditure and Income Survey - 2008. The Survey was implemented over a span of one year on a sample of households totaling 12,768, representative at the Kingdom and sub-district levels. In early August 2009, the phase of updating poverty lines and indicators was initiated based on the said survey data, which is the subject of this report.

3 Poverty Assessment Study, Dr. Radwan Shabaan, 1973. 4 Sqour et el, Study on Poverty Pockets in the Hashemite Kingdom of Jordan, Ministry of Social Development, 1989.

Department of Statistics Poverty Statistic Division

The importance of the poverty data and measures lies in raising awareness on poverty and advocating for addressing it and identifying the effect of state policies, external influences and other factors on poverty. This is in addition to surveying the circumstances before initiating the implementation of the programs related to poverty, identifying poverty progress, especially with regard to the effects of enacted policies and programs to alleviate poverty, drafting measurement and assessment reports on poverty features, and reports on achieving the Millennium Development Goals and human development reports5.

1.2.2 Stages of Measuring Poverty The methodology of calculating poverty lines and indicators in this study followed the same methodology of previous reports to assess poverty indicators based on the Household Expenditure and Income Survey 2002/2003 by the World Bank expert and counterpart national team. This methodology, which relies on calorie needs, consists of six main phases that can be summarized as follows:

First Phase: Assessing the daily calorie requirements for Jordanians, taking into consideration the physiological composition of the body: by gender, age and weight in kilogram. This is in addition to taking into consideration the variance in daily physical activity undertaken by the individual based on his/her characteristics data from the Household Expenditure and Income Survey - 2008.

Second Phase: Assessing the actual calorie intake by individuals through transferring the quantities of consumed food items by the individuals (each in their household) into calories, using pre-prepared calorie transformation coefficients based on data and measurements of the World Food Organization, in addition to data from of the Ministries of Health and Agriculture, and the Jordanian Food and Drug Corporation. These coefficients enable the transformation of the food basket of Jordanian consumers from quantities in kilogram to calories.

Third Phase: Calculating the cost of the single calorie, by dividing the total daily expenditure by individuals on food by the actual calorie intake of the individual.

Fourth Phase: Using the average calorie cost for the lowest expenditure population quintile (first quintile), the food poverty line is calculated for every household in the sample by multiplying the average quantity of calorie requirements for the individual according to body weight, age, gender, and daily physical activity, by the average calorie cost. As for the general food poverty line, it is the weighted average calculated for the food poverty lines of all members of the sample.

Fifth Phase: Calculating the non-food poverty line. This line is calculated using the simple linear regression for each dependent variable, which is the amount of the food poverty line at the individual level divided by the average expenditure of the individual on food, and the independent variable, represented by the average annual expenditure of the individual. After identifying the linear regression formula, the annual average expenditure by the individual is estimated when the dependent variable is equal to 100. The result is the estimation of the general poverty line. If the food poverty line is deducted from this, the non-food poverty line is obtained. After that, the non-food poverty line is processed with the economy of scale, derived from the size of the Jordanian household.

This methodology can be used to calculate the poverty indicators for a specific period or year based on living criteria. Living criteria mean the pattern of household expenditure on various goods and services related to the household, including the percentage of expenditure on food items from the total expenditure of the household.

5 Baker, Mohammad Hussein, Poverty in the Arab Region: Concepts and Measurement Methodologies, 2007, p. 26.

Department of Statistics Poverty Statistic Division

Sixth Phase: In this advanced stage, the poverty indicators of different periods (years) are compared at constant prices to provide a base for actual comparison through time according to international methodologies. That can be achieved by depending on a single base year (2006 in this case), poverty indicators are estimated for the remaining years to be compared with the base year through using the consumer basket of goods for the lowest expenditure segment increasing it or decreasing it (increasing it in this case), using inflation rates in the period separating the base year and the year whose indicators are to be calculated.

Table 1: Timeline for Measuring Poverty Phase Duration Preparatory phase for the Household Expenditure and Income Survey 4 months (frame updating, preparing the questionnaire and the instructions booklet, hiring and training the female enumerators) Field data collection 13 months Data checking, entry and cleaning 5 months Preparing the Household Expenditure and Income Survey Bulletin 2 months Receiving and editing the raw data of the survey 1 month Analyzing the data of all the survey files and comparing it with previous surveys 2 months Extracting the poverty indicators and drafting the preliminary statistical report from the 1 month Department of Statistics

The Department of Statistics is currently working on field implementation of the new Household Expenditure and Income Survey- 2010 (whose final results are expected within 18 months from the date of initiating the survey). The DoS is also studying the reduction of the duration between the end of the data collection and the extraction of its results. It is expected that the period listed in the table above will be reduced by six months. The following paragraph explains the process of calculating the main poverty indicators.

1.2.3 Calculating Main Poverty Indicators for 2008 The following analysis explains the process of calculating main poverty indicators at constant prices using 2006 as a base year, starting with measuring the individual’s calorie requirements and ending with calculating the poverty rate, the poverty line of the Kingdom and the governorates, identifying poverty pockets and calculating the aforementioned phases of measurement .

1.2.3.1 Person’s Calorie Requirement The average calories vary from one country to another according to a number of factors, such as age, gender, body weight and level of activity. The Jordanian individual’s calorie requirement criterion was adopted pursuant to the age and gender composition of the population in Jordan. The same style adopted in the Poverty Study in Jordan in 2004 was followed, where the James and Sheffield Tables (1990) were used to extract the weights, as explained at tables 2 and 3 that outline the calorie requirements calculated for the population of all ages.

Department of Statistics Poverty Statistic Division

Table 2: Average Weight of Jordanians by Age Age in Years Male Female 10 26.7 25.2 11 29.7 28.3 12 33.4 31.7 13 43.8 41.2 14 50.1 45.0 15 56.5 51.9 16 62.0 56.4 17 66.0 59.1 18-29 71.5 60.1 30-59 77.6 71.2 60+ 76.7 73.7 Source: Estimates of the 2004 Poverty Study work team in Jordan.

Table 3: Daily Calorie Requirement of Jordanians by Age and Gender Age in Years Male Female Less than 2 years 791 740 2-5 1,618 1,480 6-9 1,924 1,689 10 1,990 1,728 11 2,084 1,790 12 2,199 1,858 13 2,522 2,048 14 2,720 2,124 15 2,917 2,262 16 3,092 2,353 17 3,216 2,406 18-29 3,156 2,262 30-59 3,167 2,375 60 and above 2,710 2,247 2008 Average 2,325 Source: Estimates of the 2004 Poverty Study in Jordan work team, and estimates of the work team based on the Household Expenditure and Income Survey 2008.

To obtain the average calorie requirements of the population, the accumulative total of the calorie requirements is supposed to be calculated for every member of the household included in the sample. The accumulative total was calculated using the time weighted average, which gives the weight equal to the weight of the population for each household in the sample6.

It is noted from Table 3 that the Jordanian population in 2008 needed an average of 2,325 calories per person per day, based on a number of variables noted in the consumption patterns of the Jordanian household as well as the various demographic changes. Table 4 also shows the average actual consumption for individuals of calories and the average expenditure on food in real prices for 2008.

6 The (lift coefficient) for the population’s weight was identified by multiplying the (lift coefficient) of the sample weights by the family size.

Department of Statistics Poverty Statistic Division

Table 4: Average Daily Consumption of Calories by Individuals and their Annual Expenditure on Food in Real Prices and According to Quintiles for 2008 Quintile Average Daily Consumption of Calories by Average Annual Expenditure of Individuals (calorie) Individuals on Food (JD) First quintile 2,182 232.6 Second quintile 2,634 336.5 Third quintile 3,049 427.3 Fourth quintile 3,442 532.4 Fifth quintile 4,251 847.6 The Kingdom 2,977 475.2 Source: Department of Statistics / Poverty Statistics Division

1.2.3.2 Calorie Cost for Every 1000 Calories for the Jordanian Society The average calories cost was calculated for 2008, which was JD.0.4321 in constant prices (per 1,000 calories) as an average for the Kingdom. Upon dividing the community into five expenditure quintiles (based on the per capita expenditure on all food and non-food goods and services), it was found that the calorie cost increases when moving from the poorest quintile to the richest quintile (Table 5). While the average calorie cost was JD.0.3187 per 1,000 calories for the first quintile (poorest), the average cost was JD.0.6260 per 1,000 calories in the fifth quintile (richest quintile), i.e. double the first quintile (poorest quintile). For purposes of calculating the food poverty line, the average calorie cost for the first quintile (poorest) was calculated, which was JD.0.3187 per 1,000 calories.

Table 5 outlines the average calorie cost according to the five expenditure quintiles. It was found that the calorie cost for the poorest quintile is equal to about half the calorie cost among the richest quintile in 2006 and 2008. It is also noted that the cost of the thousand calories for the first quintile was 31 piaster while it was about 28 piaster in 2006, a slight increase of about 11% in two years.

Table 5: Average Calorie Cost (in JD) in Real Prices According to Household Expenditure Quintiles in 2006 and 2008 Quintile Average Cost per 1,000 Calories for 2006 Average Cost per 1,000 Calories for (JD) 2008 (JD) First Quintile 0.2775 0.3187 Second Quintile 0.3367 0.3902 Third Quintile 0.3654 0.4323 Fourth Quintile 0.4190 0.4918 Fifth Quintile 0.5427 0.6260 The Kingdom 0.4092 0.4321 Source: Department of Statistics / Poverty Statistics Division

It is also noteworthy that the daily calorie requirement of the individual is less in its average than the actual quantities of calories consumed by the individual. Table 6 shows the average calorie requirement for the Jordanian individual and the calories taken in 2006 and 2008.

Table 6: Average Requirement of Calories of the Jordanian Individual and the Actual Calories Taken in 2006 and 2008 Calories / Jordanian individual 2006 2008 Average daily calorie requirement of the individual 2,340 2,325 Average actual daily calorie taken by the individual 2,772 2,977 Percentage of the individual’s excessive consumption of required calories 18.5 28.0 (%) Source: Department of Statistics / Poverty Statistics Division

Department of Statistics Poverty Statistic Division

1.2.3.3 Deriving the Spacial Price Index for Consumer Prices For the purposes of deriving the food poverty line and estimating the general poverty line, the spacial price index for the food and non-food goods was calculated at the governorate level, based on the relative importance of all the goods consumed by the households in each governorate. These were then linked to the prices of those goods to derive the spacial price index for all goods. This was to assess the calories cost of each food basket for each governorate, taking into consideration the geographic distribution of the population and the differences in consumption patterns with the difference in relative importance of the consumed goods among the governorates (Table 7).

Table 7: Consumer Price Index (Food and non-Food) for the Governorates for the Base Year 2006 Governorate Food Non-Food General Amman 102.6 104.8 103.9 Balqa 98.2 97.6 97.8 Zarqa 100 98.3 99.0 Madaba 96.2 97.1 96.7 Irbid 98.7 96.1 97.1 Mafraq 94.9 96.1 95.6 Jerash 101.2 96.5 98.3 Ajloun 94.8 96.1 95.6 Kerak 96.9 97.9 97.5 Tafileh 97.8 97 97.3 Maan 97.9 96 96.8 Aqaba 99.8 98.2 98.8 The Kingdom 100.0 100.0 100.0 Source: Department of Statistics / Poverty Statistics Division

1.2.3.4 Calculating the Poverty Line This is the line separating the income or expenditure of the poor and the non-poor7. The person is considered poor if his per capita expenditure is less than the minimum level of the value of basic needs necessary for the individual. The minimum level of the value of the individual’s basic needs is known as the poverty line. The individuals or the households whose expenditure is less than the poverty line are classified as poor and the individuals or the households whose expenditure or income is equal or higher than the poverty line are classified as non-poor.

The poverty line is a method of measuring poverty, based on dividing the relevant community into two categories, poor and non-poor. There are different types of poverty lines, the most important of which are the absolute poverty line and the abject poverty line. The poverty line is specified according to the definition adopted for poverty and the reality of the studied community. In view of these types of poverty lines, some economists and sociologists were able to measure poverty lines, which can be defined as follows:

a. Abject Poverty Line

This is known as the food poverty line. It is defined as the level of expenditure necessary for the individual to secure the basic food needs that secure him the required calories to practice his usual daily

7 Baker, Mohammad Hussein, Measuring Poverty in Economic and Social Committee of West Asia Countries, Series of Poverty Alleviation Studies (3). United Nations, New York, 1996.

Department of Statistics Poverty Statistic Division activities and remain alive. The abject poverty line means the estimated figure line that is measured by the minimum necessary expenditure to cover the calorie requirements of the individual / household obtained from the basic food items pursuant to the food pattern of the community8.

Thus, the average value of the food poverty line (abject poverty) at the Kingdom’s level was JD.292 per individual, per year in 2008 (i.e. about JD.24.3 per month). At the level of the standard household (5.7 individuals) its value was JD.138.7 per month and JD.1,664.4 per year. The capital registered the highest value of the abject poverty line at JD.300 per individual per year, followed by Maan and Ajloun governorates at JD.295 and JD.294 consecutively. As for the lowest value of the abject poverty line, it was recorded in Mafraq Governorate, where it was JD.277 per individual per year. The low abject poverty line in Mafraq means a difference in the food consumption pattern in the governorate compared with the governorates where this line is high, such as the capital for example. Figure 1 shows the food poverty line (abject poverty) per individual, per year, according to the governorate in 2008.

Figure 1: Food Poverty Line (Extreme Poverty) Per Individual per Year by Governorate 2008

300

295

294 293

295

292 292

290

286

285 285 284

285 283

280

275

270

b. Absolute Poverty Line9

The absolute or general poverty line is defined as the level of income or expenditure necessary for the individual to secure the food needs and basic non-food needs related to housing, clothing, education,

8 Sqour et al, 1993, p. 11. 9 Absolute poverty line equation: Fwell = a + c * lpctotexp

Department of Statistics Poverty Statistic Division health and transportation. The absolute poverty line means the figure estimate line measured by the minimum level of expenditure required to cover the basic needs of the individual (food and non-food)10.

Based on the Household Expenditure and Income Survey of 2008, the absolute poverty line (food and non-food poverty) was calculated at JD.680 per individual per year in constant prices at the Kingdom’s level11. As for the governorate level, the capital registered the highest value of the absolute poverty line, at JD.703 per individual per year, followed by Madaba and Ajloun governorates with an absolute poverty line of JD.677 for each. As for the lowest absolute poverty line, it was recorded in Mafraq and Jerash governorates at JD.656 per individual per year. As for the remaining governorates, the absolute poverty lines there varied between JD.660 and JD.674 per individual per year. Figure 2 shows the absolute poverty line by governorate in 2008.

Figure 2: Absolute Poverty Line (Food and non-Food) by Governorate 2008

710 703

700

690

680

677 677

680 674

672

669

668 668

670

662

660

660 656

650

640

630

10 Squor et al., 1989, p. 17. 11 The inflation rate was used for the period of the 2006 Family Spending and Income Survey compared with the same period of the 2008 survey.

Department of Statistics Poverty Statistic Division

Consequently, the general poverty line per individual is JD.56.7 per month and for the standard household of 5.7 individuals it is JD.323 per month, and for the household of 6 individuals it is JD.340 per month.

As for the non-food poverty line, representing the difference between the absolute and abject poverty lines, it is processed with the economies of scale for the Jordanian household based on the size of the household. The value of 0.92 was adopted if the size of the household was over one individual. Thus the non-food poverty line is JD.388 per individual per year at the Kingdom’s level (i.e. about JD.32.3 per month). At the level of the standard household (5.7 individuals), its value is JD.184.3 per month and JD.2211.6 per year. As for the governorate level, the non-food poverty line reached its highest level in the capital and Aqaba with values of JD.403 and JD.385 consecutively. The non-food poverty line reached its lowest point in Jerash with JD.372 (Figure 3).

Figure 3: Non-Food Poverty Line by Governorate 2008

410

405 403 400

395

388

390

385

384 384 384

385 382

379 379

380 378

375 375

375 372 370 365 360 355

It is noteworthy that the variance in the value of the abject and absolute poverty line among the governorates is mainly due to the variance in the prices of the goods and services among the governorates. This is in addition to the variance in the demographic composition of the households (with regard to the size of the household and the age of its members, and consequently the household calorie requirement. Table 9 shows the poverty lines at the governorate level for 2008.

Department of Statistics Poverty Statistic Division

Table 8: Value of Abject, non-Food and Absolute Poverty Line for the Individual per Year in Actual Prices by Governorate 2008 (JD). Governorate Poverty Line Food (Abject) Non-Food General (Absolute) Amman 300 403 703 Balqa 290 382 672 Zarqa 285 378 662 Madaba 293 384 677 Irbid 292 375 668 Mafraq 277 379 656 Jerash 284 372 656 Ajloun 294 384 677 Kerak 286 384 669 Tafileh 285 375 660 Maan 295 379 674 Aqaba 283 385 668 The Kingdom 292 388 680 Source: Department of Statistics / Poverty Statistics Division

1.2.3.5 Absolute Poverty Incidence This indicator is called the Head Count ratio12. The population of the poor according to the 2008 results was specified as those whose per capita expenditure is less than the absolute poverty line of JD.680 per year. Thus, the poverty ratio in Jordan was 13.3% for 2008. As for the governorate level, the capital had the lowest poverty ratio at 8.3%, followed by Zarqa and Aqaba with 11.2% and 11.8% consecutively, while the poverty ratio in Mafraq registered the highest ratio among all the governorates, with 31.9%, followed by Maan and Tafileh with 24.2% and 21.1% consecutively. As for the remaining governorates, the poverty ratio varied between 14.7% and 20.3% (Table 9).

Although the Amman Governorate has the lowest percentage of poor people, it is home to approximately 25% of the total number of poor in the Kingdom due to its high population compared to the total population of the Kingdom. 20.5% and 11.9% of the poor reside in the governorates of Irbid and Mafraq respectively. Therefore, a high percentage of the poor (45%) reside in governorates with a larger population (Amman and Irbid). On the other hand, the results have shown that the lowest percentage of the poor reside in the governorate of Aqaba (2.0%), followed by the governorates of Tafileh and Ajloun at 2.2% and 2.3%, respectively (Table 9).

12 The result of dividing the population whose expenditure is below the general poverty line by the total population of the Kingdom.

Department of Statistics Poverty Statistic Division

Table 9: Poverty Ratio (Individuals) by Governorate 2008 Governorate Poverty Ratio (Incidence) % Percentage of Poor Population* %

Amman 8.3 24.6 Balqa 19.7 8.7 Zarqa 11.2 11.7 Madaba 14.9 2.6 Irbid 14.7 20.5 Mafraq 31.9 11.9 Jerash 20.3 4.6 Ajloun 13.3 2.3 Kerak 17.1 5.5 Tafileh 21.1 2.2 Maan 24.2 3.4 Aqaba 11.8 2.0 Kingdom 13.3 100 Source: Department of Statistics / Poverty Statistics Division

* Percentage of the poor population in the governorate

Figure 4: Percentage of Poverty by Governorate 2008

35 31.9

24.2

21.1

20.3

19.7

17.1

14.9

14.7

13.3

15 13.3

11.8

11.2

10 8.3

Department of Statistics Poverty Statistic Division

Figure 5: Relative Distribution of the Poor by Governorate 2008

Karak; 5.5 Jerash; 4.6 Ma'an; 3.4 Balqa; 8.7 Madaba; 2.6 Ajluon; 2.3 Zarqa; 11.7 Tafileh; 2.2 Aqaba; 2 Mafraq; 11.9

Capital; 24.6

Irbid; 20.5

1.2.3.6 Calculating the Poverty Gap Indicator13

This indicator reflects the size of the total cash gap that must be filled to elevate the household below the poverty line above it. For purposes of comparison, this gap is calculated as a percentage of the total value of consumption for the entire population when their consumption is equal to the poverty line. It is noted that the poverty gap fulfills one of the required advantages in the poverty indicators, which is the advantage of monotony and similarity. If the income level for any poor individual decreases, then poverty gap increases. The results showed that the poverty gap ratio was 2.6% at the Kingdom’s level. As for the governorates, the poverty gap ratio had the highest rate in Mafraq, at 6.3%, while the lowest ratio was in the capital at 1.6%. The cash value of the poverty gap at the Kingdom’s level was JD.101.3 million (the cash value of the poverty gap is defined as the total difference between the poverty line and the per capita expenditure of the poor individual). Table 10 shows the poverty gap ratio by governorate for 2006 and 2008.

13 Poverty gap: It is the total cash gap size necessary to elevate the household below the poverty line reach or above it, i.e. to become non-poor. For the purposes of comparison, this gap is calculated as a percentage of the total value of expenditure for the entire population when their expenditure is equal to the poverty line. PG = Σq ( Z – Y i) * 100 % NZ PG: relative poverty gap, Z: poverty line, N: total population, Y: level of expenditure /income of the poor individual, q: number of the poor

Department of Statistics Poverty Statistic Division

Table 10: Poverty Gap Ratio by Governorate 2006 and 2008 Governorate Poverty Gap Ratio Poverty Gap Ratio 2008 Real Cash Value of the Poverty 2006 (%) (%) Gap 2008 (Thousand JD) Amman 1.8 1.6 25,608 Balqa 3.5 4.1 9,527 Zarqa 2.8 1.8 9,448 Madaba 2.4 2.8 2,515 Irbid 2.7 2.7 19,915 Mafraq 6.0 6.3 12,054 Jerash 4.1 4.7 5,483 Ajloun 4.0 3.1 2,827 Kerak 4.9 3.4 5,690 Tafileh 4.0 2.5 1,367 Maan 3.0 5.6 4,100 Aqaba 4.6 3.2 2,765 Kingdom 2.8 2.6 101,302 Source: Department of Statistics / Poverty Statistics Division

Figure 6: Percentage Gap Rate by Governorate 2008

6.3

6 5.6

4.7

4.1

3.4

3.2

3.1

2.8

2.7

2.6 2.5

3 1.8 2

1.2.3.7 Calculating the Poverty Severity Indicator14 This indicator measures the variance in the degree of poverty among the individuals under the poverty line themselves. It is calculated by considering it equal to the mean of the total relative squares of the poverty gaps. The poverty severity indicator is considered a relative measure similar to the linear regression and variance, providing an image of the extent of diversity in poverty levels among the poor themselves. The higher the value of the indicator, the more the variance is. Thus, the severity of poverty

14 Poverty Severity Indicator is a relative measure that gives a picture of the extent of variance in the degree of poverty between the poor themselves. The highest the indicator value is the higher the degree of variance. PS = 1 Σ (Z – Y) * 100%, where PS: poverty severity. N Z

Department of Statistics Poverty Statistic Division at the level of the Kingdom was 0.791% compared with its value of 0.93%. As for the governorate level, Amman was the least in expenditure variance of the poor with 0.468 while Maan was the highest in the expenditure variance by the poor at 1.998%. Table 11 shows the severity of poverty indicators by governorate for 2008.

Table 11: Severity of Poverty Indicator by Governorate 2006 and 2008 Governorate Severity of Poverty Percentage 2006 % Severity of Poverty Percentage 2008 % Amman 0.56 0.47 Balqa 1.17 1.30 Zarqa 0.83 0.47 Madaba 0.79 0.66 Irbid 0.93 0.81 Mafraq 2.50 1.96 Jerash 1.36 1.67 Ajloun 1.35 1.07 Kerak 1.54 1.25 Tafileh 1.21 0.57 Maan 1.02 2.00 Aqaba 1.74 1.30 Kingdom 0.93 0.79 Source: Department of Statistics / Poverty Statistics Division

Figure 7 : severity of poverty ratio 2008

2.5

2 1.96

1.67

1.5

1.3 1.3

1.25

1.07

0.81

0.79

0.66

0.57 0.47 0.5 0.47

Department of Statistics Poverty Statistic Division

Table 12: Poverty Indicators Summary Indicator 2006 2008 Average calorie requirement for the Jordanian individual per day 2340 2325 Average cost in JD for 1,000 calories for entire population 0.4092 0.4321 Average cost in JD for 1,000 calories for the lowest expenditure quintile 0.2775 0.3187 Food poverty line in JD per individual, per year 239 292 Food poverty line in JD per individual, per month 19.9 24.3 Non-food poverty line in JD per individual, per year 317 388 Non-food poverty line in JD per individual, per month 26.4 32.3 General poverty line in JD per individual, per year 556 680 General poverty line in JD per individual, per month 46.4 56.7 Percentage of the poor population to the Kingdom’s population 13.0 13.3 Average household size 5.7 5.7 Average annual household expenditure 7521 7057 Average annual household member expenditure 1306 1238 Share of the poorest 10% of the population from total expenditure (%) 3.1 3.4 Share of the richest 10% of the population from total expenditure (%) 27.2 29.5 Average annual household income 6220 6166 Average annual household member income 1084 1081.7 Income distribution equity measure: Gini coefficient 0.399 0.393 Source: Department of Statistics / Poverty Statistics Division

As for the equity of income distribution, it is measured by the Gini coefficient, which measures the degree of inequality in the distribution of the total income. The equity indicator improves the closer it is to zero and equity is decreased the closer it comes to one. Its value was 0.393 the time, showing a slight improvement in the equity of distribution, at a decrease of 1.5% in 2008 compared with 2006 when it was 0.399. Comparing 2008 and 2006 with regard to the share of the various population groups from the total income of the Kingdom, it is noted there is a decrease in the share of the richest population segment in the Kingdom (fifth quintile) of the total real income, from 43.9% in 2006 to 35.1% in 2008. This means that the rich classes do not become richer than the other social categories with the passage of time, as some may think.

On the other hand, the available data shows an increase in the share of the poorest population segment (first quintile) of the total Kingdom’s income from 7.7% in 2006 to 11.2% in 2008. This means that the lower expenditure population category (the poorest) improved their economic situation at constant prices for 2006. This also means that the price and economic developments during the subject period did not make the poor poorer. On the contrary, the economic developments and fiscal and social policies followed by the government during 2008 poured in the interest of the poorest groups.

As for the three remaining population quintiles (making up 60% of the population), their share of the real total income of the Kingdom was 53.7% in 2008 compared with 43.9% in 2006. It is clear from this analysis that there was improvement recorded in the state of the poorest population quintiles and the average population quintiles, compared with a retreat in the relative state of the richest population quintiles. This means, ultimately, higher levels of equity in the distribution of income during the subject period.

Department of Statistics Poverty Statistic Division

Table 13: Distribution of Number and Percentage of Poor by Governorate for 2008 Percentage Percentage of Percentage No of Poor Poverty No. of Poor No. of Poor Governorate of Poor Poor of Abject below Food Ratio % Individuals Households Population % Households % Poverty Poverty Line Capital 8.3 192,597 24,769 24.6 5.7 0.0007 1,678 Balqa 19.7 68,298 8,550 8.7 13.9 0.0062 2,138 Zarqa 11.2 91,456 11,589 11.7 7.9 0 0 Madaba 14.9 20,027 2,465 2.6 10.4 0 0 Irbid 14.7 160,474 20,836 20.5 11.6 0.0016 1,705 Mafraq 31.9 92,764 11,458 11.9 25.6 0.0038 1,095 Jerash 20.3 36,243 5,014 4.6 16.1 0.0232 4,133 Ajloun 13.3 17,783 2,131 2.3 10.1 0 0 Kerak 17.1 42,655 5,001 5.5 12 0.0078 1,950 Tafileh 21.1 17,424 2,350 2.2 16.9 0 0 Maan 24.2 26,186 3,088 3.4 17.8 0.008 871 Aqaba 11.8 15,494 1,869 2.0 8.3 0.011 1,440 Kingdom 13.3 781,403 99,121 100 9.5 0.0026 15,010 Source: Department of Statistics / Poverty Statistics Division

1.2.4 Poverty Pockets in 2008 The results indicate a remarkable variance in the poverty ratio between the sub-districts. They reached their maximum levels in Wadi Araba (about 69.3%), and their minimum 0.0% and 0.7% in Qasr sub- District in Kerak Governorate and Jame'ah sub- District in the capital, consecutively.

Figure 8 shows the poverty pockets for 2008, which are the sub-districts where the poverty rates were higher or equal to 25%15. Based on this criterion, the number of poverty pockets totaled 32. It is noteworthy that only two sub-districts had poverty rates over 60%, namely Ruweished in Mafraq Governorate and Wadi Araba in Aqaba Governorate. The lowest poverty ratio was recorded in Ein Al Basha sub-District in the Balqa Governorate, with 25.2%, Table 14.

15 According to the definition adopted earlier by the government committee mandated with identifying poverty pockets.

Department of Statistics Poverty Statistic Division

Figure 8: Poverty Pockets in 2008

69.3

70 65

48.4

46.5

44.1

42.3

40.8

40.2

39.6

39.4

38.1

37.6

35.3

33.6

33.2

32.8

32.2

31.4

28.6 28.6

28.5

27.9

27.7

26.1

25.9

25.7 25.7

30 25.2

An analysis of the changes to the poverty pockets between 2006 and 2008 reveals an increase in the number of poverty pockets from 22 pockets in 2006 to 32 pockets in 2008. Four sub-districts classified as poverty pockets in 2006 were able to exit the list of poverty pockets classified in 2008. These are Um Rassas, Arjan, Kufranja and Mojeb, while 18 sub-districts classified as poverty pockets in 2006 remained on the 2008 list. These pockets are: Wadi Araba, Ruweished, Mreigha, Gour Mazraa, Deisa, Gour Safi, Khalidia, Salihia, Qweira, Deir Kahef, Badia Shamalia Gharbia, Qatraneh, Hosha, Burma, Bseira, Shouneh Shamalia, Balama and Jafer. The 2008 list of poverty pockets also included sub-districts that were not included on the 2006 list of poverty pockets. These are Um Jmal, Azraq, Shouneh Janoubieh, Um Quttein, Huseinieh, Sahab, Arhab, Athruh, Mafraq, Muwaqqar, Areed, Dleil, Teiba and Ein Basha. Although the number of pockets increased by 14 new pockets (i.e. an increase of 44% of the total pockets), the percentage of the poor in these pockets constitutes only 17.5% (or 136 thousand) of the total number of the poor in the Kingdom, which is 781 thousand. The percentage of the poor in these new pockets is 29% of its population, which is a percentage close to the standard (25%). No doubt this remarkable increase in the number of poverty pockets in 2008 compared with their number in 2006 may be the result of the diminished purchasing power resulting from the rising inflation in the period 2006- 2008, which was reflected on the levels of real consumption expenditure in these areas. In spite of this, the level of poverty is generally consistent in Jordan, because it is consistent in the most populated governorates in which more than two thirds of the population of the Kingdom is concentrated.

Department of Statistics Poverty Statistic Division

Table 14: Poverty Ratio, Population and Number of Poor in Poverty Pockets for 2008 by Administrative Division Governorate Sub-District Poverty ratio 2008 Population No of Poor Aqaba Wadi Araba 69.3 6,481 4,492 Mafraq Ruweished 65.0 5,675 3,687 Maan Mreigha 48.4 8,326 4,027 Kerak Gour Mazraa 44.1 15,721 6,934 Aqaba Deisa 41.0 4,091 1,677 Kerak Gour Safi 40.8 23,472 9,570 Mafraq Khalidia 39.4 36,979 14,569 Mafraq Salihia 38.1 18,337 6,977 Aqaba Qweura 37.6 13,888 5,223 Mafraq Deir Kahf 35.3 9,078 3,206 Mafraq Badia Shamalia Gharbia 33.6 28,588 9,608 Kerak Qatraneh 33.2 7,064 2,343 Mafraq Hosha 32.8 18,140 5,955 Jerash Burma 32.2 10,698 3,440 Tafileh Basira 31.4 19,943 6,265 Irbid Shouneh Shamalia 28.6 102,632 29,350 Mafraq Balama 28.5 27,081 7,718 Maan Jafer 25.7 5,003 1,285 Mafraq Um Jmal 46.5 16,605 7,725 Zarqa Azraq 42.3 12,513 5,289 Balqa Shouneh Janoubieh 40.2 37,514 15,083 Mafraq Um Quttein 39.6 10,390 4,110 Maan Husseinieh 37.0 10,032 3,712 Capital Sahab 28.6 61,369 17,523 Mafraq Arhab 27.9 21,490 5,994 Maan Athruh 27.7 4,436 1,229 Mafraq Mafraq 27.0 61,235 16,563 Capital Muwaqqar 26.1 24,182 6,316 Madaba Areed 26.0 4,082 1,061 Zarqa Dleil 25.9 28,671 7,440 Irbid Taiba 25.7 35,888 9,206 Balqa Ein Basha 25.2 139,301 35,136 Source: Department of Statistics / Poverty Statistics Division

A close look at the geographic distribution of the 2008 poverty pockets reveals that they are distributed among 11 governorates out of the twelve governorates in the Kingdom. The Mafraq Governorate (the governorate that recorded the highest poverty ratio compared with the remaining governorates) had 11 pockets. Maan, that came in second place among the governorates in terms of the high rate of poverty,

Department of Statistics Poverty Statistic Division had 4 pockets, followed by Karak and Aqaba with 3 pockets each, and the capital, Balqa, Zarqa and Irbid with 2 pockets each. The Jerash, Tafileh and Madaba had one pocket each. Thus, the poverty pockets are distributed among the three regions in the Kingdom but in varying degrees. There are 14 pockets in the north, 7 pockets in the center and 11 in the south.

Table 15: Poverty Pockets in 2006 Sub-District Poverty ratio Sub-District Poverty Percentage Mreigha 27.1 Shouneh Shamalia 31.4 Um Rasas 26.2 Gour Mazraa 45.4 Burma 29.1 Ruweished 73.7 Deisa 44.4 Gour Safi 52.8 Khalidia 36.1 Basira 31.9 Qatraneh 35.6 Balama 31.5 Deir Kahef 34.5 Salihia 42.8 Wadi Araba 62.5 Qweira 46.6 Badia Shamalia Gharbia 28.3 Arjan 29.7 Jafer 26.6 Kufranja 36.9 Hosha 36.1 Mujeb 44.5 Source: Department of Statistics / Poverty Statistics Division

Department of Statistics Poverty Statistic Division

Chapter Two:

Analytical Framework

2.1 Analysis of Household Expenditure and Income 2006-2008

2.1.1 Analysis of Household Expenditure

a. Average Household Expenditure on Food Items

The 2008 Household Expenditure and Income Survey results indicate that the average household expenditure on food goods in real prices was JD.2, 685.1, or 38% of the total expenditure of the household. In 2006, it was JD.2,756.6, or 36.6% of the total expenditure of the household. This indicates a decrease of 2.6% in the average household expenditure on food goods between 2006 and 2008.

As for arranging the food expenditure groups for all five expenditure quintiles and the poorest quintile, "the meats and chicken group" came in first, followed by "cereals and their products". The "dairy and eggs group" came in fourth place. The "meat and chicken group" came in first place for the first quintile (the poorest segment), followed by "the cereals and their products" in second place, then the "vegetables group" and the "tobacco and cigarettes group".

With regard to the cash value and relative shares of expenditure on food groups, the "meat and chicken group" was the first in terms of annual household expenditure among the other food expenditure groups in 2008. The average annual expenditure on this group was JD.613.7 in real prices or 22.9% of the total expenditure on food items compared with JD.592.9 in 2006, or 21.5%. It is noted from the household expenditure by quintiles for 2008 that the richest segment (fifth quintile) recorded the highest percentage of expenditure on this group. The average expenditure on it was JD.941.1 in real prices, i.e. 26.6% of the total expenditure on food items, while the average expenditure by the poorest segment (first quintile) was JD.293.7 in 2008, or 16.7% of the total expenditure on food items. As for 2006, at the quintile level, the average expenditure on the "meat and chicken group" was JD.918.6 , or 33.3% for the richest quintile while the average was JD.284.9, or 10.3% for the poorest quintile (Tables 16 and 17). In spite of the small size of the household in the richest quintile, its expenditure on the "meat and chicken group" was high (the average of household size in the poorest quintile was 7.6 members compared with 4.2 in the richest segment in 2008). This is in line with the rational consumer behavior of the household, which shows that the difference in the average expenditure of each quintile to fulfill the calorie requirement differs according to different sources of these calories and their prices, in addition to the change in the income levels that will be addressed in the following part of this chapter.

The "tobacco and cigarette group" also occupied an advanced ranking in terms of average household expenditure. The average household expenditure on this group was JD.305.6 or 11.4% of the total expenditure on food goods compared with JD.286.8 in 2006. This was followed by the "dairy products and eggs group" in terms of average expenditure on food goods. The average expenditure on this group was JD.291.2 or 10.6% in 2006, while in 2008 it came in fourth place with an average expenditure of

Department of Statistics Poverty Statistic Division

JD.257.9 in real prices, a decrease of 11.4% compared with 2006. As for the "cereals and products group", the average expenditure on it was JD.285.6 in real prices in 2008, a slight decrease of 0.2% compared with 2006. In terms of the average expenditure at the quintile level for 2008, the richest quintile had the highest value of expenditure average on dairy products and eggs, with JD.344.7 compared with the poorest quintile (JD.192.8).

In 2006, at the quintile level for the “cereals and products group” (Table 16), the middle quintile and the following quintile had the highest average of expenditure (JD.295.9 and JD.294 consecutively), while the poorest quintile recorded the least average expenditure with JD.266.4.

From the analysis of expenditure on the "tobacco and cigarettes group", the importance of this group in the Jordanian consumer’s budget is noted. It had an advanced rank in the expenditure on food goods in 2008, after it had an average rank in terms of the average total expenditure on food goods in 2006. As for the quintile level in 2008, the middle quintile (third quintile) recorded the highest expenditure average compared with other quintile. It was JD.343.2 in real prices compared with the poorest quintile at JD.240.3. In 2006, and at the quintile level, the fourth quintile recorded an average expenditure of JD.288.4 compared with the poorest quintile at JD.220.2.

Consequently, the rise in expenditure averages on the "tobacco and cigarettes group" and its move from a central rank to an advanced rank between the years 2006 and 2008 may be due to the prevalence of smoking in Jordan especially among the youth, and the spread of the nargila phenomenon in recent years. It is noteworthy here that the average expenditure of the Jordanian household on the "tobacco and cigarettes group" is considered the largest expenditure share of what the household may spend on any of the other food groups with the exception of the "meat and chicken group" (see tables 20 and 23). The on average real expenditure of the Jordanian household on tobacco and cigarettes was JD.305.6 annually in 2006 prices (JD.0.84 per household day), i.e. about JD.336 million annually at the Kingdom’s level in 2008 at 2006 prices16.

In 2006, the average expenditure on the alcohol, nuts, and dried and canned legumes groups was the least for the poorest segment, totaling JD.0.2, JD.9.3 and JD.26.9 for the three groups consecutively.

Compared with the richest quintile, the average expenditure on the "dried and canned legumes group" was JD.37.9, and on the" spices and food additives group" it was JD.78.6. These groups are considered the least in expenditure compared with the remaining items of expenditure for this group. Table 16 shows the percentage of expenditure on food compared to total expenditure (relative importance), in line with the economic theory that confirms that the individual starts by meeting his basic needs. The highest percentage was for the first quintile (the poorest quintile), with 47% of total expenditure, which retreated consecutively for the remaining quintiles until it reached 31.4% for the fifth quintile (richest quintile).

16 It is noteworthy that the number of families in the Kingdom in 2008 was about 1.1 million families, which means that in view of the average spending of the family of 305.6 JD for 2008 in 2006 prices, the total real spending at the Kingdom’s level will be 336.2 JD for 2008 (i.e. 400 million JD in current prices for the same year).

Department of Statistics Poverty Statistic Division

Table 16: Average Household Expenditure on Food Items for 2006 and 2008 in JD Quintiles Average Ranking for 2008 Second Fourth Fifth Kingdom’s Expenditure Groups First Quintile Third Quintile First Quintile Quintile Quintile Kingdom Quintile 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 Cereals and their products 266.4 273.5 286.2 288.4 295.9 291.4 294 286.5 283.8 286 286.1 285.6 2 3 Meats and chicken 284.9 293.7 416.1 426.5 521 551.2 606 629.6 918.6 941 592.9 613.7 1 1 Fish and seafood 28.5 29.7 39.9 41.2 57.6 53.6 65.4 63.7 89.8 109 60.5 65 13 12 Dairy, dairy products and eggs 181.5 161.2 243.8 210.1 278.6 244 312.3 266.4 374.9 345 291.2 257.9 5 4 Oils and fats 77.3 66 109.1 79.8 129 103 134.4 114.4 162.5 145 128 107.3 9 11 Fruits 74.8 57.6 113.9 89.4 147.4 113.7 170 133.3 225.8 188 156.7 125.5 11 8 Vegetables 195.3 192.8 241 221.8 259.8 235.1 279.8 239.6 306 267 263.7 236 4 5 Dried and canned legumes 26.9 22.2 35 25.1 39.4 28.1 38.1 27.9 37.9 30.1 36.1 27.2 14 15 Spices and food additives 39.2 38.2 53 49 60.9 58.3 68.6 62.3 78.6 71 62.7 58 12 13 Nuts 9.3 11.3 21.3 22.2 37.4 34.9 50.1 46.5 88.1 89 46.8 46.3 15 14 Sugar and its products 102.8 115.6 134 142 163.6 161.2 195.7 172.5 306.8 243 194.8 175.7 7 6 Tea, coffee and cocoa 64.8 75.3 84.8 90.4 94.2 107.2 109.8 117.2 139.6 157 103.8 115.2 8 9 Other foods 125.5 119 141.2 133.7 157.1 140.8 159.5 139.8 241 202 172.7 152.7 6 7 Drinks 47.3 63.3 69.5 87.7 80.4 104 95 115.5 128.5 160 89.7 112.7 10 10 Alcoholic drinks 0.2 0 0 0.1 0 0 0.1 0 2.7 2.5 0.8 0.7 16 16 Tobacco and cigarettes 220.2 240.3 269.2 297.3 275.9 343.2 288.4 326.2 278.8 304 269.9 305.6 3 2 Average household 1745 1759.6 2258 2204.6 2598.1 2570 2867 2741.3 3664 3539 2756.4 2685 expenditure on food

Share of food from the total 45.3 47.1 44.3 45.5 42.2 43.5 39.3 40 29.8 31.4 36.6 38 household expenditure % Source: Department of Statistics / Poverty Statistics Division

Department of Statistics Poverty Statistic Division b. Average Household Expenditure on Non-Food Items

The results of the Household Expenditure and Income Survey – 2008 indicate that the average real expenditure on non-food goods reached JD.4372.1 or 62% of total expenditure. In 2006, the average non- expenditure was JD.4765.0, or 63.4% of total expenditure. The "housing and its annexes group" came in first place in terms of average household expenditure in 2006 and 2008, with the real expenditure average on this group reaching JD.1316.8 in 2008, a rise of 10% from its recorded value in 2006, which was JD.1196.6. This was followed by expenditure on transport, which includes expenditure on private car fuel, the price of private cars, and expenditure on internal and external transport and transportation fees in second place. The average real expenditure on this group was about JD.921 in 2008, a rise of 7.1% from its recorded value in 2006, which was JD.860.8. The education group came in third place, which is the same rank that the group occupied in 2006. The average expenditure on this was about JD.395 in spite a significant decrease of 25.4% compared with its recorded value in 2006, when it was JD.529.1. This decrease in education expenditure in the average was due to the Royal Decree exempting households from school donations and fees at public sector schools as well as the transfer of many children from private education to public education, due to the increase of education costs in the private sector. Expenditure on communications, which includes expenditure on telegraphs, post and phones, including mobile phones and internet, came in fourth rank with an average expenditure of JD.335.8 in 2008, a slight increase of 1.5% from the average expenditure in 2006 (see Table 17).

An analysis of average expenditure on non-food goods at the level of quintiles in 2008 shows that the group of expenditure on housing and its annexes came in first place in the expenditure on non-food goods for the first quintile (the poorest quintile). The average expenditure on this was JD.749.1 annually. Expenditure on transport came in second, with the average expenditure totaling JD.254.2 annually, followed by the fuel and lighting group in third place with an average of JD.205.6 annually. Next came personal hygiene in fourth place with an annual average expenditure of JD.168.1, which includes men and children shaving, shaving tools, tissues, sanitary pads, shampoo and accessories.

Department of Statistics Poverty Statistic Division

Table 17: Average household expenditure on non-Food Items for 2006 and 2008 in JD Quintile Average Ranking for 2008 Kingdom’s Expenditure Groups First Quintile Second Quintile Third Quintile Fourth Quintile Fifth Quintile First Kingdom 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 Quintile Expenditure on housing 701.5 749.1 843.3 907.7 962.2 1,036 1,112.3 1,197.1 1,933.7 2,185.6 1,196.6 1,317 1 1 and its annexes Transport 232.1 254.2 364.8 435 514.7 668.8 738.7 929.6 1,873.5 1,770.1 860.8 921.2 2 2 Education 112.2 91.6 222.5 144.1 344.2 225.7 506.6 338.3 1,107.6 886.2 529.1 394.7 6 3 Communications 126.9 138.2 193.3 200.4 260.5 260.5 332.8 310.6 580.8 604.6 330.8 335.8 5 4 Fuel and lighting 339.9 205.6 373 227.1 403.2 240.4 418.3 253.8 642 367.6 456 270.2 3 5 Personal hygiene 144.8 168.1 181 189.9 204.9 211.6 225.5 224.6 328 302 229.3 228.6 4 6 Medical care 64.5 49.7 92.5 68.5 134.9 89.9 172.4 123.7 429.9 325.4 204.5 151.2 9 7 Other expenses 13.4 18.2 20.6 32.5 41.9 45.9 75.9 78.9 275.9 341.6 104.3 126.5 15 8 Home cleaning 72.6 74.4 97.3 89.7 109.6 101.9 124.9 109.4 153 133.6 116.9 105.9 7 9 materials Furniture, carpets and 24.5 22.6 57.8 39.4 88.7 65.7 123.2 112.9 310.1 168 140.8 92.7 13 10 mattresses Women’s clothing 51.4 39.6 76.1 61.7 98.6 82 121.9 93.1 187 139.2 116.5 90.1 10 11 Men’s clothing 36.4 29.8 54.6 50.2 74.8 67.1 99.7 78.9 155.1 124.4 92.6 76.7 12 12 Culture and 23.3 12.6 44.3 33.5 73.9 44.6 95.8 58.2 273.8 166.8 119.7 73.9 16 13 entertainment Shoes 47.5 38.9 63.2 54.6 73.3 65.6 80.4 69.7 102.7 90.7 77.1 67.4 11 14 Children’s clothing 76.2 65.6 86.7 73.5 88 72.3 82.4 60.3 75.8 47.1 81.5 62.1 8 15 Home appliances 22.2 18.3 41.8 34 60.3 53.5 74.3 52.9 133.5 77.3 74.1 51.2 14 16 Home utensils and 14.3 12.6 22 17.8 28.4 22.8 32.3 24 41.1 28.6 29.5 22.3 17 17 tools Fabrics and tailoring 2 0.9 1.9 1.8 3.9 2.7 4.8 2.8 9.2 3.9 4.9 2.6 18 18 expenses Family size 7.6 7.6 6.7 6.6 6.1 6 5.3 5.1 4.3 4.2 5.8 5.7 Average household expenditure on non- 2,105.6 1,977.2 2,836.7 2645.8 3565.8 3,341 4,422.4 4,105.9 8,612.9 7,735.6 4,765 4,372 food goods Overall average of 3,850.6 3,736.8 5,094.7 4,850.4 6,164 5,911 7,289.4 6,847.2 12,276.4 11,274.1 7,521.3 7,057 household expenditure Source: Department of Statistics / Poverty Statistics Division

Department of Statistics Poverty Statistic Division

It is noteworthy that there are non-food groups whose real average expenditure was less than the previous groups with regard to the poorest quintile, such as the fabrics and tailoring expenses groups, whose average expenditure was JD.0.9, the home utensils and tools group (JD.12.6), and the cultural and sports entertainment group (JD.12.6). As for the richest quintile, their expenditure on fabric and tailoring expenses was the lowest (JD.3.9), on the home utensils and tools group it was (JD.28.6) and on the children’s clothing group it was (JD.47.1) in 2008. As for 2006, expenditure on fabrics and tailoring expenses was the lowest (2.0 JD); on the other consumption expenses group it was (JD.13.4) and on the home utensils and tools group it was (JD.14.3) in the poorest group. In the richest group, expenditure on fabrics and tailoring expenses was the least (JD.9.2), on the home utensils and tools group it was (JD.41.1) and on the children’s clothing group it was (JD.75.8). See Table 17.

A comparison of Tables 16 and 17 reveals that expenditure on all goods groups saw a decrease between 2006 and 2008, except in some goods groups that saw an increase in expenditure, namely expenditure on housing and its annexes and expenditure on communications. This increase and change in expenditure on these groups reflects a decrease in the price flexibility of demand for these goods, which means an increase in demand on them in view of their importance to the consumer regardless of their price levels, which saw unprecedented increases in 2008 compared with 2006. c. Relative Importance of Food Items

A study of the food commodities groups and their relative importance Kingdom-wide in 2008, outlined in Table 18, reveals that the meats and chicken group registered the greatest relative importance among the other food groups, at 8.7% followed by the cereals and their products group, the dairy, dairy products and eggs group at 4% and 3.7% consecutively. Compared with 2006, it was discovered that the meat and chicken group recorded the highest relative importance among the food commodities at 7.9% followed by the dairy, dairy products and eggs group (3.9%) and the cereals and their products group (3.8%).

An analysis of the relative importance of the food goods at the quintile level for 2008 for the poorest group reveals that the meat and chicken group came in first place in relative importance, at 7.9%. It was followed by the cereals and their products group (7.3%) and the tobacco and cigarettes group in third place (compared with the fourth place for all groups) at a relative importance of 6.4%. In comparison, the relative importance of the food goods at the first quintile (poorest) level in 2006 placed meats and chicken in first place with a relative importance of (7.4%) followed by cereals and their products (6.9%) and the tobacco and cigarettes group with 5.7%. For the richest group, the meat and chicken group had the greatest importance (7.5%) followed by the dairy and their products group (3.1%).

It was also noted that there are groups that recorded less relative importance among the food expenditure groups for 2008. These are the dried and canned legumes group and the nuts group. In 2006, the food groups referred to in 2008 recorded less relative importance in 2006 as well.

Department of Statistics Poverty Statistic Division

Table 18: Relative Importance of Household expenditure on Food Items According to Expenditure Quintiles for 2006 and 2008 (%)

Quintiles Kingdom’s Food expenditure Groups First Quintile Second Quintile Third Quintile Fourth Quintile Fifth Quintile Average 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 cereals and their products 6.9 7.3 5.6 5.9 4.8 4.9 4.0 4.2 2.3 2.5 3.8 4.0 Meat and chicken 7.4 7.9 8.2 8.8 8.5 9.3 8.3 9.2 7.5 8.3 7.9 8.7

Fish and seafood 0.7 0.8 0.8 0.8 0.9 0.9 0.9 0.9 0.7 1 0.8 0.9

Dairy, dairy products and eggs 4.7 4.3 4.8 4.3 4.5 4.1 4.3 3.9 3.1 3.1 3.9 3.7

Oils and fats 2 1.8 2.1 1.6 2.1 1.7 1.8 1.7 1.3 1.3 1.7 1.5

Fruits 1.9 1.5 2.2 1.8 2.4 1.9 2.3 1.9 1.8 1.7 2.1 1.8

Vegetables 5.1 5.2 4.7 4.6 4.2 4 3.8 3.5 2.5 2.4 3.5 3.3 Dried and canned legumes 0.7 0.6 0.7 0.5 0.6 0.5 0.5 0.4 0.3 0.3 0.5 0.4 Spices and food additives 1.0 1.0 1.0 1.0 1.0 1.0 0.9 0.9 0.6 0.6 0.8 0.8 Nuts 0.2 0.3 0.4 0.5 0.6 0.6 0.7 0.7 0.7 0.8 0.6 0.7

Sugar and its products 2.7 3.1 2.6 2.9 2.7 2.7 2.7 2.5 2.5 2.2 2.6 2.5

Tea, coffee and cocoa 1.7 2 1.7 1.9 1.5 1.8 1.5 1.7 1.1 1.4 1.4 1.6

Other foods 3.3 3.2 2.8 2.8 2.5 2.4 2.2 2 2 1.8 2.3 2.2 Drinks 1.2 1.7 1.4 1.8 1.3 1.8 1.3 1.7 1 1.4 1.2 1.6 Alcoholic drinks 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Tobacco and cigarettes 5.7 6.4 5.3 6.1 4.5 5.8 4 4.8 2.3 2.7 3.6 4.3 Average household expenditure on food 45.3 47.1 44.3 45.5 42.2 43.5 39.3 40.0 29.8 31.4 36.6 38.0 Source: Department of Statistics / Poverty Statistics Division

Department of Statistics Poverty Statistic Division d. Relative Importance of non-Food Items

Table 19 points to the relative importance of household expenditure of the total average expenditure at the five quintiles and the Kingdom level. It is noted that expenditure on the housing and its annexes group came in first place at 18.7% of the total average household expenditure of 2008. Transport came in second place, at 13.1% of the total average household expenditure. In 2006, expenditure on housing and its annexes came in first in relative importance (15.9%), followed at a slightly lesser percentage by the transport group at a relative importance of (11.4%).

As for the quintile level, the expenditure group on housing and its annexes maintained first rank in 2008, especially for the poorest group, with a relative importance of 20% and 19.4% for the richest quintile, followed by transport by 6.8% for the poorest group and 15.7% of the richest quintile.

[Type text] Page 45

Department of Statistics Poverty Statistic Division

Table 19: Relative Importance of Household Expenditure on non-Food Items According to Expenditure Quintiles in Real Prices for 2008 (%) quintile Kingdom’s Non Food expenditure Groups First Quintile Second Quintile Third Quintile Fourth Quintile Fifth Quintile Average 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008 Men’s clothing 0.9 0.8 1.1 1 1.2 1.1 1.4 1.2 1.3 1.1 1.2 1.1 Women’s clothing 1.3 1.1 1.5 1.3 1.6 1.4 1.7 1.4 1.5 1.2 1.5 1.3 Children’s clothing 2 1.8 1.7 1.5 1.4 1.2 1.1 0.9 0.6 0.4 1.1 0.9 Fabrics and tailoring expenses 0.1 0 0 0 0.1 0 0.1 0 0.1 0 0.1 0 Shoes 1.2 1 .12 1.1 1.2 1.1 1.1 1 0.8 0.8 1 1 Expenditure on housing and its 18.2 20 16.6 18.7 15.6 17.5 15.3 17.5 15.8 19.4 15.9 18.7 annexes Fuel and lighting 8.8 5.5 7.3 4.7 6.5 4.1 5.7 3.7 5.2 3.3 6.1 3.8 Furniture, carpets and mattresses 0.6 0.6 1.1 0.8 1.4 1.1 1.7 1.6 2.5 1.5 1.9 1.3 Home appliances 0.6 0.5 0.8 0.7 1 0.9 1 0.8 1.1 0.7 1 0.7 Home utensils and tools 0.4 0.3 0.4 0.4 0.5 0.4 0.4 0.4 0.3 0.3 0.4 0.3 Home cleaning materials 1.9 2 1.9 1.8 1.8 1.7 1.7 1.6 1.2 1.2 1.6 1.5 Transport 6 6.8 7.2 9 8.4 11.3 10.1 13.6 15.3 15.7 11.4 13.1 Communications 3.3 3.7 3.8 4.1 4.2 4.4 4.6 4.5 4.7 5.4 4.4 4.8 Education 2.9 2.5 4.4 3 5.6 3.8 7 4.9 9 7.9 7 5.6 Medical care 1.7 1.3 1.8 1.4 2.2 1.5 2.4 1.8 3.5 2.9 2.7 2.1 Personal Hygiene 3.8 4.5 3.6 3.9 3.3 3.6 3.1 3.3 2.7 2.7 3 3.2 Culture and entertainment 0.6 0.3 0.9 0.7 1.2 0.8 1.3 0.8 2.2 1.5 1.6 1 Other expenses 0.3 0.5 0.4 0.7 0.7 0.8 1 1.2 2.2 3 1.4 1.8 Relative importance of non-food 54.7 52.9 55.7 54.5 57.8 56.5 60.7 60 70.2 68.7 63.4 61.9 goods Total 100 100 100 100 100 100 100 100 100 100 100 100 Source: Department of Statistics / Poverty Statistics Division

[Type text] Page 46 e. Rates of Growth in Total Expenditure between 2006 and 2008

Results indicate a regression in the total expenditure in constant prices on food and non-food items in the Kingdom between 2006 and 2008, at a rate of 6.2%. This is a clear response to the significant increases in the prices of various goods and services between the two years. The percentage of regression in the average expenditure on non-food items, 8.2%, is larger than the percentage of regression in the average expenditure on food items, 2.6%. This is largely in line with the change patterns in real expenditure (demand) on food and non-food goods in the Kingdom, and patterns of change in the levels of their prices. Demand on goods (of all types) decreased by 6.2% as a result of the increase in the general level of prices, a percentage of 19% between 2006 and 2008.

It is also noted that in spite of the increase in food prices during the two years (28.3%), it was higher than the increase registered in the prices of non-food items (13.4%). However, the degree of decrease in demand on non-food items was larger than the degree of decrease in demand on food items by almost three times. This is in harmony with the fact that demand on non-food items was more flexible to changes in prices than demand on food items in general.

An analysis of the patterns of growth in real expenditure on goods between 2006 and 2008 according to the quintiles reveals a 0.8% rise in the average expenditure on food items in the case of the lower expenditure group (poorest group) compared with the decrease in the average expenditure of the richest group on the food items (3.4%). This is due to the increase in the relative importance of the food goods in the consumer basket within the first quintile (lower expenditure or poorest) compared with the richest group. The relative importance of food goods is 47.1% in the case of the poorest group compared with 31.4% in the case of the richest group. The difference in patterns of growth in the average expenditure between the poorest and richest groups reflects on the type of goods that the households in both groups spend on. The goods items of the rich groups are characterized by diversity in the food and non-food items, in addition to the difference in demand flexibilities between the two groups. The demand of the poorest groups is not flexible to changes in prices compared with the significant flexibility in the demand of the rich groups to price changes. Moreover, there are differences in levels of income that determine the levels of expenditure for all population groups, including the richest and the poorest groups (the incomes and their various sources will be analyzed in the next part of this chapter).

As for real expenditure on non-food goods, the results show a decreased demand for these goods, for all five quintiles. The percentage of decrease in the average expenditure of the richest group was higher than the percentage of decrease in the average expenditure of the poorest group. The reason for this is the marked decrease in the expenditure of the five quintile households (the poorest and the richest) on the furniture, carpet and home appliances group primarily. This is in addition to the increasing relative importance of the non-food items in the budget of this group’s consumers, which was 67% in 2008, compared with its relative importance in the budget of the poorest group, which was 53%. Demand for non-food goods is characterized by high flexibility to change in the levels of prices, for all population groups. Department of Statistics Poverty Statistic Division

Table 20: Average Growth in Household Expenditure in Real Prices for 2006 and 2008 (%) Five Expenditure Quintiles Group Total

First Second Third Fourth Fifth Quintile Quintile Quintile Quintile Quintile Rate of growth in total expenditure -3.0 -4.8 -4.1 -6.1 -8.2 -6.2 Rate of growth on food goods 0.8 -2.4 -1.1 -4.4 -3.4 -2.6 Rate of growth on non-food goods -6.1 -6.7 -6.3 -7.2 -10.2 -8.2 Source: Department of Statistics / Poverty Statistics Division

Finally, it is also worth noting that Table 20, which reflects the patterns of food and non-food expenditure in real prices, and after excluding the effect of inflation pressures that reached their highest levels in 2008, is of significant importance for its initial explanation of the changes to the actual expenditure of household on food and non-food items. This is in addition to explaining how this expenditure was affected by the other economic changes that took place over the two years. In view of the importance of this analysis and its ties to several other aspects affecting patterns of consumption on one hand, and its susceptibility to the measures and steps adopted by the government at the time on the other, this topic requires a more accurate and in-depth detailed and analytical study.

2.1.2 Household Income Analysis for 2006-2008 based on 2006 (Real Prices)

a. Household Income

The results of the 2008 household expenditure and Income Survey indicate that the average annual income of households with 5.7 persons was 6,166 JD annually (i.e. 514 JD per month). Thus, average annual per capita income in the Kingdom is 1,081 JD (i.e. 90 JD a month). The household sources of income vary; however, employment income was the largest contributor to income obtained by the household, followed by transfer incomes, self-employed income, rent income, property income, followed by the other incomes. Figure 9 highlights the relative distribution of household income from the various sources in 2008.

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Figure 9: Relative Distribution of Household Income by Source 2008 Other 0% Transfers 21% Property 1% Employment 47% Rent 15%

Self-employed 16%

By comparing the average household income from its various sources in 2006 and 2008, it is found that the average household income from employment increased by 2.1%, while the income of the self-employed increased by 8.2%. As for transfer income, it decreased by 4.9% while property income decreased by 26.9% and rent income decreased by 9%. The average annual household income decreased from 6,220 JD per year in 2006 to 6,166 JD per year in 2008 (from 518 to 514 JD per month for the household). The average annual household income also decreased from 1,084 JD per year in 2006 to 1,081 JD in 2008.

Table 21: Household Income in Real Terms in 2008 (2006=100) Quintile First Second Third Fourth Fifth Kingdom Quintile Quintile Quintile Quintile Quintile

Employment 1,145.3 1,947.9 2,588.6 3,220.9 4526.4 2,879.0 Self-employed 233.6 360.2 487.5 722.0 2,438.9 980.0 Rent 312.2 506.4 650.0 837.1 2,007.9 962.0 Property 1.6 8.5 22.1 25.8 201.7 63.8 Transfers 665.5 904.4 1,088.4 1,350.2 2,008.2 1,281.7 Other 0 0 0 0 0 0 Total income 2,358.2 3,727.5 4,836.7 6,156.0 11,183.1 6,166.4

Source: Department of Statistics / Poverty Statistics Division

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Table 22: Average Household Income by Source of Income by Quintiles in 2006 Quintile First Second Third Fourth Fifth Kingdom Quintile Quintile Quintile Quintile Quintile Employment 1,084.4 1,885.6 2,387.8 3,082.4 4,600.3 2,820.2 Self-employed 279.0 411.8 572.3 807.6 1,941.3 905.8 Rent 373.3 528.4 681.7 894.8 2,233.4 1,057.3 Property 4.1 12.4 22.6 36.4 276.7 87.3 Transfers 836.0 895.2 1,051.1 1,375.8 2,157.1 1,347.9 Other 0.0 0.0 0.0 0.0 0.0 0.0 Total income 2,576.8 3,733.8 4,715.5 6,197.5 11,212.8 6,219.7 Source: Department of Statistics / Poverty Statistics Division

Table 23: Average Household Income by Source of Income by Quintiles in 2008 Quintile First Second Third Fourth Fifth Kingdom Quintile Quintile Quintile Quintile Quintile Employment 5.6 3.3 8.4 4.5 -1.6 2.1 Self-employed -16.3 -12.5 -14.8 -10.6 25.6 8.2 Rent -16.4 -4.2 -4.6 -6.4 -10.1 -9.0 Property -61.2 -31.2 -1.9 -29.0 -27.1 -26.9 Transfers -20.4 1.0 3.5 -1.9 -6.9 -4.9 Other 0 0 0 0 0 0 Total income -8.5 -0.2 2.6 -0.7 -0.3 -0.9 Source: Department of Statistics / Poverty Statistics Division

Figure 10: Average Household Income by Governorate 2006, 2008

8000

7412

7221

7000

6419

6244

6220

6166

6053

5892

5862 5862

5860

5732

5615 5615

6000 5583

5458

5405

5321

5270

5190

5164

5127

5061

4911 4681 5000 4576

4000

3000

2000

1000

2006 2008

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A comparison of the average household income by governorate between 2006 and 2008 reveals that the capital has the highest average income in 2008, at 7,221 JD, followed by Aqaba Governorate at 6,244 JD, while Madaba and Balqa Governorates have the lowest average income at 4,576 and 4,911 JD consecutively. The average income for the single household was 6,166 JD at the level of the Kingdom for 2008.

The percentage of change in the average household income has varied by governorate between 2006 and 2008. The income averages in six governorates increased; these are Zarqa, 9.5%, Jerash, 6.8%, Ajloun, 3.3%, Mafraq, 2.6%, Tafileh, 1.6% and Kerak 0.5%.

The average household income decreased in the remaining six governorates in the same period. Balqa Governorate has the highest percentage of decrease, at 14.3%, followed by Madaba, at 11.4%, Irbid, at 4.2%, Aqaba, by 2.7%, the capital, at 2.6% and finally Maan at 0.6%. This reflected on the average household income at the level of the Kingdom, which registered a decrease of 0.9% for the same period.

Figure 11: Income Resources by Poor and Rich Quintile Richest Group Poorest Group Other Other 0% 0%

Transfers Transfers 28% 28% Employm Employm ent ent 40% 49% Rent Rent Property 18% Property 13% 0% 0% Self- Self- employe employe d d 10% 10% Figure 11 clarifies the comparison between the income by sources between the richest quintile (fifth quintile) and the poorest quintile (first quintile). It makes clear that income from employment was the largest contributor among the sources of income for households in the poorest quintile (first quintile), as it contributed 49%, while transfer income came in second place at a contribution of 28%. The income of the self-employed and employers contributed 10% and rent contributed 13%, while income from property contributed a small percentage, 0.1% only. Income from employment contributed 8 percentage points less than its contribution to the total income for the poorest household quintile, contributing to 40.5% of the total income of the richest household quintile (fifth quintile). Income of the self-employed and employers contributed 21.8%, income from rent contributed 18% and income from transfers contributed 18% while income from property contributed about 2%.

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Figure 12: Average Household Income Growth by Quintiles between 2006 and 2008

Fifth Quintile -0.3

Fourth Quintile -0.7

Third Quintile 2.6

Second Quintile -0.2

-8.5 First Quintile

-10 -8 -6 -4 -2 0 2 4

The average annual income of the poorest quintile (first quintile) decreased by 8.5% between 2006 and 2008, totaling JD.2,358 per year. This decrease in the income of the first quintile (the poorest quintile) is due to the decrease in the income of this quintile from all income sources (with the exception of income from employment). These sources will be addressed in addition to the reasons for the changes to the income of the poorest quintile, including an overview of every source individually later in the report. On the other hand, the average annual income of the household in the richest quintile (fifth quintile) decreased by 0.3%, totaling JD.11,183. The average income of the household at the Kingdom’s level has also decreased by 0.9% (figure 13).

Figure 13: Average Annual Household Income in 2006 and 2008

12000 11212.8 11183.1

10000

8000

6197.5

6156

4836.7

6000 4715.5

3727.5

3733.8 2576.8

4000 2358.2 2000 0 First Quintile Second Third Fourth Fifth Quintile Quintile Quintile Quintile 2008 2006

b. Employment Income17

Income from employment for the households of the poorest quintile (first quintile) contributed about 48% to the total income of the household in 2008, while it contributed about 42% in 2006. This reflects the household in the first quintile’s (poorest) dependence on income from this

17 Income from employment: Cash wages and salaries and in-kind privileges.

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Department of Statistics Poverty Statistic Division source, pointing to the nature of the work and jobs occupied by individuals of this type, which relies on regular income, usually jobs. On the other hand, income from employment for the richest group (fifth quintile) contributed about 40% in 2008 and 2006. As for the Kingdom’s level, income from employment contributed about 45.3% in 2006 and 46.6% in 2008.

The average income from employment for households in the poorest quintile (first quintile) was JD.1,145.3 per year in 2008, an increase of 5.6% compared with 2006. Conversely, the average annual income of the household from employment in the richest quintile (fifth quintile) was JD.4,526.4 per year in 2008, a decrease of 1.6%, compared with 2006. At the level of the Kingdom it increased by 2.1%.

Figure 14: Average Household Income Growth from Employment between 2006 and 2008

Fifth Quintile -1.6

Fourth Quintile 4.5

Third Quintile 8.4

Second Quintile 3.3

First Quintile 5.6

-4 -2 0 2 4 6 8 10

Figure 15: Average Household Income from Employment in 2006 and 2008

2820.2 Kingdom 2879 4600.3 Fifth Quintile 4526.4 3082.4 Fourth Quintile 3220.9 2387.8 Third Quintile 2588.6 1885.6 Second Quintile 1947.9 1084.4 First Quintile 1145.3

0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2006 2008

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Department of Statistics Poverty Statistic Division c. Income of Self-Employed Workers and Employers

The income of the self-employed or employers at the level of the household within the poorest quintile (first quintile) contributed about 9.9% of the total household income in 2008, while it constituted 10.8% in 2006. This reflects to an extent the inability of the owners of businesses in this group to endure the market fluctuations in view of the limited financial and technical capacities, as the most prominent problem facing business owners (which are mostly small and medium) is the inability to appropriately administer their businesses. This is due to the low levels of education for this quintile. This was noted in the social analysis of the family. Conversely, the income of the self-employed and business owners at the level of household within the richest quintile (fifth quintile) constituted 21.8% in 2008 and 17.3% in 2006. This information reveals the opportunities provided by academic qualifications combined with financial ability. At the Kingdom’s level, the income of the self-employed and the employers at the household level constituted about 14.7% in 2006 and 15.9% in 2008 of the household income.

The average annual income for the self-employed and employers at the level of the household in the poorest quintile (first quintile) was 233 JD per year in 2008, a decrease of 16.3% from 2006. In 2008, the average annual income for the self-employed and the employers at the household level in the richest quintile (fifth quintile) was 1,941 JD, a tangible increase of 25.6%. The average income of the self-employed and employers at the level of household in the Kingdom also increased by 8.2%.

Figure 16: Average Income Growth for Self-Employed between 2006 and 2008

Fifth quintile 25.6

-10.6 Fourth quintile

-14.8 Third quintile

-12.5 Second quintile

-16.3 First quintile

-20.0 -10.0 0.0 10.0 20.0 30.0

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Department of Statistics Poverty Statistic Division d. Rent Income18

Income from rent for the household in the richest quintile (first quintile) constituted about 13.2% of the total income of the household in 2008, while it constituted 13.9% in 2006. This may be due to the high rent value for the homes and buildings owned by this quintile during 2006 and 2008. Conversely, this source constituted 17.9% of the total annual income for the household in the richest quintile compared with 19.9% in 2006. At the level of the Kingdom, income from rent for household constituted about 16.9% in 2006 and 15.6% in 2008.

The average annual income from rent for households in the poorest quintile (first quintile) was JD. 312 annually in 2008, a decrease of 16.4% compared 2006. This average in the richest quintile (fifth quintile) was JD.2, 007.9 in 2008, a decrease of 10.1%. At the Kingdom’s level, the percentage decreased 9.0% between 2006 and 2008.

Figure 17: Average Rate of Rent Income Growth between 2006 and 2008

-9 Kingdom

-10.1 Fifth Quintile

-6.4 Fourth Quintile

-4.6 Third Quintile

-4.2 Second Quintile

-16.4 First Quintile

-18 -16 -14 -12 -10 -8 -6 -4 -2 0

e. Property Income19

The annual income for the household from property for the poorest quintile (first quintile) did not constitute a real percentage of the total annual income for household in this group, in 2006 and 2008. It contributed 0.3% and 1% in the two years consecutively. Income from property constituted 20.6% and 2.2% of the annual income for household in 2006 and 2008 consecutively for the richest quintile (fifth quintile). Annual income from property constituted about 1.4% and 1.1% in 2006 and 2008 of the total household income Kingdom-wide.

18 Rent: Income of household from the rent of housing and non-housing buildings and the estimated value of the rent of an owned property. 19 Income from property: Interests of deposits and bonds, and profits of stocks, shares and contributions.

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The average annual income from property for the household in the poorest quintile (first quintile) was JD .1.6 in 2008, a decrease of 61.2% compared with 2006. In 2008, it was JD 201.7 JD for the richest quintile (fifth quintile), a decrease of 27.1% compared with 2006. At the Kingdom’s level, the average annual income for the household from property between 2006 and 2008 decreased by 26.9%.

The decrease in income from property for the first, second and fourth quintiles may reflect the damage to those affected by the global exchange crisis that coincided with the global financial crisis.

Figure 18: Average of Property Income Growth between 2006 and 2008

-27.1 Fifth quintile

-29 Fourth quintile

-1.9 Third quintile

-31.2 Second quintile

-61.2 First quintile

-70 -60 -50 -40 -30 -20 -10 0

f. Income from Transfers20

Income from transfers is defined as the total cash amount for the goods and services received by the family, usually in a periodic form and for purposes of financing the consumption expenditure of the household by others, without the household providing any commitment to work or offering financial assets to others (without return). It also includes income from retirement and other ongoing transfers from residents and non-residents.

Income from transfers to household of the poorest quintile (first quintile) constituted about 28.2% of their total income in 2008, while it constituted about 32.5% in 2006. Meanwhile, income from transfers to the household of the richest quintile (fifth quintile) constituted 17.9% in 2008 and 19.2% in 2006. At the Kingdom’s level, income from transfers to households contributed about 20.8% of the total income of the household in 2008 and 21.7% in 2006.

The average income from transfers for households in the poorest quintile (first quintile) was JD.665 in 2008, a decrease of 20.4% compared with 2006. This average in the richest quintile

20 Transfers: The total cash amounts for the goods and services received by the household, usually in a periodic form and for purposes of financing the consumption expenditure of the household by others, without the household providing any commitment to work or offering financial assets to others (without return). It also includes income from retirement and other ongoing transfers from residents and non- residents.

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(fifth quintile) was JD.2, 157.1 in 2008; average annual income from transfers was JD.1, 281.7 in 2008, a decrease of 4.9% from its value in 2006.

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Figure 19: Average Income Growth from Transfers between 2006 and 2008

-4.9 Kingdom

-6.9 Fifth Quintile

Fourth Quintile -1.9

Third Quintile 3.5

Second Quintile 1

-20.4 First Quintile

-25 -20 -15 -10 -5 0 5

The relative distribution of individuals by income groups (table 24) shows that the percentage of individuals whose income is less than or equal to JD 350 per year was 9.1%, while the second quintile of individuals whose income exceeds JD.350 but is less than or equal to JD.1,000 constituted about 53.9% of the population. The third quintile constituted 35.1%, and the fourth quintile constituted 1.5%, while the percentage of individuals who average per capita income exceeded JD.10,000 per year did not exceed 0.2% (fifth and sixth quintiles). The individuals whose income ranged between JD.350 and 4000 annually constituted about 98% of the total members of society.

Table 24: Relative Distribution of Individuals by Income Quintiles in 2008 No Annual Income Quintile Relative Distribution of Individuals % 1 0 to less than or equal to 350 JD 9.1 2 Larger than 350 – less than or equal to 1,000 JD 53.9 3 Larger than 1,000 – less than or equal to 4,000 JD 35.1 4 Larger than 4,000 – less than or equal to 10,000 JD 1.5 5 Larger than 10,000 – less than or equal to 15,000 JD 0.2 6 Larger than 15,000 JD 0.2 Source: Department of Statistics / Poverty Statistics Division

The average household income suffered a deficit in expense coverage in 2008 in the value of JD.890.7 annually. The percentage of expenditure coverage by income, on average, for households at the Kingdom’s level was 87.4%. An analysis of the relationship between income and expenditure at the quintile level (Figure 20) reveals that the movement from the first quintile with the lower income to the fifth quintile with the highest income will lead to growth in the average expenditure. This means a continuing direct correlation between income and expenditure at the level of the various population quintiles. Also noted in this regard is the clear variance in the percentage of expenditure coverage by income in the five quintiles. This percentage was

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Department of Statistics Poverty Statistic Division about 100% for the first quintile, 93% for the second quintile, 87% for the third and fourth quintiles and 82% for the richest population quintiles.

The reason for the change in the percentage of expenditure coverage by income among the quintiles is due to the high ability of the non-poor quintiles to access credit, thus increasing the ability to obtain loans from the banking system. This is in addition to the increased saving capacity among these quintiles, which made their real expenditure larger than their real income, as shown in Figure 20. The expenditure of the poorest quintiles was equal to their income level as a basic result of the inability of these quintiles to access credit. Consequently, they cannot obtain loans from the banking system. This is in addition to the low saving capacity of these quintiles.

Figure 20: Average Annual Household Income and Expenditure for 2008 in JD

7057.1 Kingdom 6166.4 12401.7 Fifth Quintile 10213.9 7467.8 Fourth Quintile 6463.6 6252.2 Third Quintile 5423.3 5208.1 الدخل Second Quintile 4822.9 االنفاق 3956.8 First Quintile 3909.1

2.1.3 Prices and Purchasing Power

The change in the general level of prices is among the important factors affecting the standards of living for households in general and the poor quintiles in particular. The continuing increase in the general level of prices and the prices of the various commodity groups erodes the purchasing power, and thus changes the consumption pattern for households in a manner that reflects the price change trends on one hand and the income levels on the other.

The first chapter of this report addressed the variances in the cost of the calories obtained by the poor compared with the rich. It was found that the cost of the calorie obtained by the most expenditure quintile (the richest) is almost equal to double the cost of obtaining the same amount of calories for the lower expenditure quintile (poorest). The reason for this is the difference in the quality of the food goods within the food consumption basket necessary to obtain the same number of calories for both population groups, in addition to the difference in their prices.

An analysis of the general level of prices in the Kingdom reveals that the year 2008 saw a significant rise in the prices of all goods and services compared with the two previous years in a manner that led to the inflation rate reaching its highest levels since 1991. By the end of 2008, measured by the relative change in the consumer price index, it was 13.9%, compared with 4.7% during 2007.

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This severe increase in prices is primarily attributed to a host of external and local factors, namely the increase in the prices of oil, oil derivatives, and basic agricultural goods in the international market as a result of the rising global demand for these items. This was supported by a strong global economic growth at the time, especially by the growing economies like India and China. Additionally, the widespread use of bio-fuel as an alternative to oil internationally21, the effect of liberating the price of oil derivatives on the goods and services in the local market, which came into effect in February 2008, and the severe frost that adversely affected the production of several agricultural crops, led to the increase in their prices22.

For purposes of analyzing the changes to the general level of prices and the various goods groups over the span of the 2008 Household Expenditure and Income Survey, the survey period spanning March 2008 to February 2009 was compared with the same period in 2006 and 2007. It was found that the general level of prices saw an increase of about 19%.

The following can be noted on the development of the prices of all main goods groups that make up the basket of the consumer price index:

 28.3% increase in the prices of the food items group between 2006 and 2008. This increase was the result of an increase in the prices of all items that make up this group. The price of “oils and fats” increased by 65.5%, “dried and canned legumes” by 57.2%, “dairy, dairy products and eggs” by 49.9%, “fruits” by 37.8%, “cereals and their products” by 37.6%, “meats and chicken” by 29.1%, “vegetables” by 25.6% and “fish and seafood products” by 15%. 42% of the total household expenditure is directed at the food items group.  13.4% increase in the prices of the non-food items group between 2006 and 2008. This increase was the result of the increase in prices of all items that make up this group, specifically the price index of oil and lighting prices. These increased by 51.6% due to the direct impact of the rising prices of the oil derivatives. Home cleaning materials also increased by 14.1% and transport increased by 20.3%.

Figure 21 shows that the increase in the prices of the food items group specifically as well as the fuel prices had a significant impact on the purchasing power of the various population quintile quintiles during the period January to September 2008. These increases during the period (January to September 2008) reflected on the general price index and all commodity groups during the period of the survey (March 2008 to February 2009).

21 For details on basic food item prices and oil prices, as well as the reasons for the severe price hikes, see: United Nations, World Economic Situation and Prospects 2009, pp. 44-54. 22 It is noteworthy that the Central Bank of Jordan, in estimates on the origin of inflation pressures affecting the national economy in 2008, found that 53% of the inflation rate recorded that year was a result of external factors, namely price increases in the international market. The remaining percentage, estimated at 47%, was a result of local factors that included the severe front that adversely affected the volume of production and the supplied agricultural crops, and consequently their increased prices. For more details, see: Central Bank of Jordan, 2008 Annual Report, pp. 17-20.

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Figure 21: Trend of the General Price Index and Price Index for Some commodity Groups for 2008

General IndexGeneral Index

Cereals and their products

Fuel and lighting

Meats and chicken

Dairy, dairy products and eggs

Oils and fats

A study of the effects of these increases on the prices of the various goods items at the consumption level of the Jordanian household reveals the following:

 Lower levels of real expenditure on goods between 2006 and 2008. The reason for this is the rise in the prices of all goods in 2008 compared with 2006, as explained in the second chapter of this report. This is in addition to the desire of the household to spend on the various goods according to their available actual financial capacities. The average expenditure on food and non-food goods for the various population groups decreased. The percentage of decrease in the average of real expenditure was 3% for the lower expenditure quintile (poorest), 4.8% for the second quintile of the population, 4.1% for the third quintile, 6.1% for the fourth quintile and 8.2% for the most expenditure or richest quintile. The percentage of decrease in the average expenditure by the household throughout the Kingdom was 6.2% for the same period.

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Figure 22: Average Jordanian Household Expenditure on Various Food Groups for 2006 and 2008

9 8.7 7.9 8 7

5 4.3

3.9

3.8

3.7

3.6

3.5

3.3

4 2.3

2.6

2.5

3 2.2

2.1

1.8

1.7

1.6 1.6

1.5

1.4

1.2

0.9

0.8 0.8

0.8

0.7

0.6

0.5

0.4

0 0 0

2006 2008

 Lower averages of real expenditure for all population quintiles, regardless of their expenditure levels, on the food commodity group, with the exception of the lower expenditure group. This group’s average expenditure on the food goods group increased, if slightly, at 0.8%. The reason for this is that the food commodity group includes basic commodity groups that are tied to the individual’s need of these goods to continue living, such as cereals, dairy, meats and vegetables. The amount of consumption for these foods items is specifically tied to the basic daily requirements of the individuals necessary to maintain life, health, and physical strength, which enables the undertaking of daily duties. This is true for members of the richest or poorest social quintiles. Therefore, expenditure on them will increase regardless of the increase in their prices.  Higher expenditure on the tobacco and cigarettes group for all population groups in parallel with increased expenditure on tea, coffee and cocoa for all population groups. The percentage of increase in real expenditure on these two groups was 9.1% and 16.2% for the lower expenditure quintile (first quintile), compared with an increase of 13.2% and 10.9% for the most expenditure quintile (fifth quintile), consecutively.  Lower real average expenditure for households across the Kingdom, for most non-food goods, with the exception of expenditure on the housing and its attachments group and on the transport group. The average expenditure by the household on these groups increased by 10% and 6.9% consecutively. A comparison of the lower expenditure (first quintile) and higher expenditure (fifth quintile) categories reveals a continued growth in the average expenditure by the household at the level of the Kingdom in the case of the lower expenditure group. The average expenditure on all non-food items for this quintile ranged between 8% and 55%, while its average expenditure on housing and its attachments increased by 6.8%, on transport by 5.8%, on hygiene by 16.2% and on home cleaning items by 2.5%. As for the richest population quintile (fifth quintile), its expenditure on all non-food goods (including transport and communications) decreased by 4.4% to 57.5% as a result of the increase in their prices, while its average expenditure on housing and its attachments increased by 13% during the same period. It is noted here that the rich quintiles, whose expenditure usually increases by buying new cars and increased car

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mileage for entertainment purposes as part of their expenditure on transport and communications. But it has shown a clear response to the global changes in fuel prices, which led to lower expenditure in this item. On the other hand, the increased fuel prices that led to increasing transport wages for passengers caused an increase in the average expenditure by poor household on this item since public transport means (buses and shuttle taxis) are basic services that the poor quintiles cannot live without it.

Figure 23: Relative Importance of Household Expenditure on Food Items for 2006 and 2008

8.7

9 7.9 8 7

4.3

3.9

3.8

3.7

3.6

3.5 3.3

2.6

2.5

2.3

2.2

2.1

1.8

1.7

1.6 1.6

1.5

1.4

1.2

0.9

0.8 0.8 0.8

0.7

0.6

0.5

0.4

0 0 0

2006 2008

A comparison of the changes in the consumption pattern of households in the lower expenditure quintile of the population (poorest) with the remaining households within the other population quintiles of various expenditure levels during the period that is the subject of the study reveals the following:

 As we move from a lower expenditure population quintile to a higher expenditure population quintile, the relative importance of the average expenditure by a household on the foods items groups decreases, coupled with an increased relative importance of the average expenditure by household on non-food items. This is in harmony with the economic theory stating that whenever expenditure increases due to increased income, expenditure of households on luxury goods and entertainment services increases, while it decreases on food items in the consumer’s budget.  The features of change in the consumption pattern of all population quintiles in spite of differences in their expenditure were no different from the general pattern recorded across the Kingdom. The data indicates a rise in the relative importance of the average expenditure by all households on the food groups starting from the first lower expenditure quintile and ending with the fifth most expenditure quintile as shown in Figure 24. This is in parallel with the decreased expenditure by these households on non- food items from the total expenditure during the same period (Figure 25). However, the increase in the relative importance of expenditure by the households on food items between 2006 and 2008 clearly varied by population quintiles. This increase was 1.8% in the case of the first quintile (lower expenditure), 1.2% for the second quintile, 1.3 for the fourth quintile, 0.7% for the fourth quintile and 1.6 for the fifth (high expenditure) quintile. This means that the increasing prices of the food items had a great effect on

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households of low income and expenditure compared with the high income and expenditure households. This is somewhat in line with the earlier reference on the behavior of each quintile towards food and non-food expenditure. As for expenditure on education, the results reveal that the average expenditure by households within the poorest quintile was modest compared with the expenditure by households in the richest quintile, whose average expenditure was six times the expenditure of the poor household (JD.12 compared with JD.70 ). This indicates that education subsidies by the government mostly target the lower income quintiles as most of their children are students in public schools, while the richest quintile in society tends to increase expenditure on educational services offered by the private sector.

Figure 24: Figure 24: Relative Importance of Expenditure on Food Items by Population Quintile (%)

47.1

45.5

45.3

50 44.3

43.5

42.2

39.3

36.6

31.4 29.8 30

0 First Second Third Fourth Fifth Kingdom Quintile Quintile Quintile Quintile Quintile 2006 2008

Figure 25: Relative Importance of Expenditure on non-Food Items by Population Quintiles (%)

70.2

68.7

70 63.4

61.9

60.7

57.8

56.5

55.7 54.7

60 54.5 52.9 50 40 30 20 10 0 First Second Third Fourth Fifth Kingdom Quintile Quintile Quintile Quintile Quintile 2006 2008

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 As for the first expenditure quintile (lower expenditure), its share of expenditure on cereals, meats, chicken, dairy, eggs, vegetables, sugar, tea and coffee groups has gone up as a percentage of its total expenditure to 29.8% in 2008 (while its share was 28.5% in 2006). The relative importance of housing expenses also increased to 20%, while it constituted 18.2% for the same period. The same also applies to the share of expenditure on transport out of the total expenditure, whose relative importance increased from 9.3% in 2006 to 10.2% in 2008. This means that this last item, linked to the prices of oil derivatives, contributed to increasing the effect of inflation pressures on the prices of food items.

2.1.4 Social Analysis a. Age and Gender Composition

The data in Table 25 indicates an increase in the percentage of males in all quintiles with the exception of the first and fifth quintiles, where the percentage of females exceeds that of the males. The reason for the high percentage of females in the first quintile may be attributed to demographic factors such as the higher life expectancy among females compared with males on one hand and immigration on the other.

Table 25: Relative Distribution of Individuals by Gender and Expenditure Quintiles Expenditure Quintiles Males Females Total First quintile 49.4 50.6 100 Second quintile 50.7 49.3 100 Third quintile 51.3 48.7 100 Fourth quintile 51.5 48.5 100 Fifth quintile 48.6 51.4 100 Source: Department of Statistics / Poverty Statistics Division

Table 26 highlights the high percentage of young people aged four years or less in the poor quintile compared with the remaining quintiles. The percentage was 15.5% compared with 7.3% in the richest quintile, which indicates high rates of birth in the poorest quintile compared with the levels in the richest quintile. The overall birth rate in this quintile was 4 children per female, while it was 5.2 children per female in the poor quintile. On the other hand, a decrease in the percentage of seniors is noted in the poor quintile, at 3.7%, while it was 14.2% in the riches quintile. This clearly indicates a difference in the life expectancy between the two quintiles, and its high rate in the richest quintile as a result of social and economic circumstances. As we move from the richest quintile to the poorest quintile, the percentage of demographic dependency increases. The results indicate that the young (the population whose age is less than 15 years) constitute about half of the poor quintile while they constitute about 20% of the population in the richest quintile.

Table 26: Relative Distribution of Individuals by Age Composition and Expenditure Quintiles Expenditure Quintiles 0-4 5-14 15-24 25-59 60+ Total % First quintile 15.5 32.5 19.2 29.1 3.7 100 Second quintile 15.2 28.4 20.1 32.4 3.9 100 Third quintile 13.8 24.3 23.6 33.7 4.5 100 Fourth quintile 11.9 19.8 24.3 37.0 7.0 100 Fifth quintile 7.3 12.8 24.3 41.5 14.2 100 Kingdom 12.7 23.6 22.3 34.7 6.7 100

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Source: Department of Statistics / Poverty Statistics Division b. Marital Status of Heads of Households

The data indicates that the married household heads constitute the majority of household heads in all expenditure quintiles, with an increase in their percentage in the first, second and third quintiles. The reason could be that the households in the lower quintiles tend to have married household heads such as fathers, grandfathers or any of their married members. On the other hand, an increase in the percentage of single or widowed household heads is noted in the richest quintile (fifth quintile).

Table 27: Relative Distribution of Heads of Households by Marital Status and Expenditure Quintiles Expenditure Quintiles Single Married Divorced Widowed Total First quintile 0.3 93.9 0.5 5.2 100 Second quintile 0.3 92.7 0.4 6.6 100 Third quintile 0.8 90.6 0.5 8.0 100 Fourth quintile 1.8 87.7 0.4 10.1 100 Fifth quintile 3.5 81.9 1.1 13.5 100 Source: Department of Statistics / Poverty Statistics Division

Table 28: Head of Household Gender by Quintiles for 2008 Gender First Second Third Fourth Fifth quintile quintile quintile quintile quintile Male 93.1 92.3 90.2 88.3 82.5 Female 6.9 7.7 9.8 11.7 17.5 Source: Department of Statistics / Poverty Statistics Division

The survey results indicate that the vast majority of household heads in Jordan, or 88.5% of them, are men, compared with 11.5% of women. The results show that men constitute the majority of household heads in all quintiles. Their percentage also tends to decrease with the increase in the quintile ranking. Male household heads constitute the largest percentage, 93.1%, in the first quintile (poorest quintile), and constitute 92.3%, 90.2% and 88.3% in the second, third and fourth quintiles. The percentage of male household heads decreases in the fifth quintile, constituting 82.5% compared with 17.5% women. The reason for the decrease in the percentage of the male household heads in this quintile compared with their percentage in the other quintiles may be due to the status acquired by women in the richest quintiles. c. Educational Level

Data from the Household Expenditure and Income Survey – 2008 indicates that the percentage of individuals without any educational qualification (pre-elementary) is higher in the poorest quintile compared with their percentage in the remaining quintiles, where it was 57.6%, as shown in Table 29. This indicates that the poor individuals do not tend to continue their education to higher educational levels. The reason for this may be the tendency to assist the household in providing a source of income to meet their needs or due to the family’s inability to afford

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Table 29: Relative Distribution of Individuals (15 years or more) by Gender, Educational Level and Expenditure Quintiles Expenditure Pre- Elementary Apprenticeship Secondary Higher Total Quintiles Elementary Education % First quintile 57.6 23.1 0.4 12.9 6.0 100.0 Male 58.8 23.9 0.7 10.9 5.8 100 Female 56.5 22.3 0.1 14.9 6.3 100 Second quintile 47.4 23.7 0.3 17.3 11.3 100 Male 46.1 26.0 0.6 16.6 10.6 100 Female 48.7 21.4 0.0 17.9 12.0 100 Third quintile 40.9 24.3 0.5 19.7 14.7 100 Male 39.4 26.6 0.9 18.4 14.8 100 Female 42.6 21.8 0.0 21.0 14.6 100 Fourth quintile 36.6 21.3 0.3 21.2 20.7 100 Male 34.3 23.9 0.5 21.4 19.9 100 Female 39.0 16.6 0.1 20.9 21.4 100 Fifth quintile 30.8 12.6 0.3 22.5 33.7 100 Male 24.1 16.0 0.7 22.9 36.3 100 Female 36.9 9.5 0.0 22.1 31.4 100 Kingdom 41.3 20.4 0.3 19.2 18.8 100 Male 38.8 22.9 0.7 18.6 19.0 100 Female 43.7 17.9 0.0 19.7 18.6 100 Source: Department of Statistics / Poverty Statistics Division d. Average Household Size The data points to an increase in the average household size in the poor quintile, at 7.6 individuals per family, while the average household size in the poor quintile was 4.2 individuals. The increase in the number of members within the poor household increases the burdens on them in terms of the individual’s needs of various goods and services, which leads to retreating educational levels for example as mentioned earlier. The average size of the poor household is above the Kingdom’s average of 5.7 individuals. No doubt, the high average of household size among the poor is due to high fertility rates, while these rates are lower among the rich households. This in turn led to a decrease in their size (4.2 individuals). Additionally, this increases the burden of dependency in the households of the poor quintile.

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Table 30: Average Household Size and Expenditure Quintiles Expenditure Quintiles Average Household Size First quintile 7.6 Second quintile 6.6 Third quintile 6.0 Fourth quintile 5.1 Fifth quintile 4.2 Kingdom 5.7 Source: Department of Statistics / Poverty Statistics Division e. Work Status of Individuals The data indicates that about three quarters (72.7%) of working individuals of the poor quintile are wage earners, employers, or are self-employed, while the unemployed constitute 27.3%. In contrast, the percentage of working individuals in the richest quintile (fifth quintile) constitutes about 85%. The percentage of employers in the richest quintile compared with their percentage in the poorest quintile is higher (8.4% and 0.8% for each quintile respectively). This means that the working individuals in the richest quintile are more capable of securing financial resources that enable them to own their economic resources and manage them with other employees that they hire.

Table 31: Relative Distribution of Individuals by Academic Status and Expenditure Quintiles Work Status Wage Earner Employer Self-Employed Unemployed Total First quintile 64.5 0.8 7.4 27.3 100 Second quintile 68.8 2.3 8.6 20.2 100 Third quintile 70.0 3.1 7.9 19.1 100 Fourth quintile 68.0 4.7 8.8 18.5 100 Fifth quintile 70.5 8.4 5.9 15.2 100 Kingdom 68.4 3.9 7.7 20.1 100 Source: Department of Statistics / Poverty Statistics Division

Over three quarters of the employed poor are working in the services sector, and their percentage is also high in the industrial sector, at 14.9% compared with 9.2% of the workers of the richest quintile. The percentage of employers of the richest quintile in the services sector was 89.7%. The percentage of workers of the poorest quintile is higher in the agriculture sector compared with the workers of the other quintiles, at 6.3% of the total working poor. It must be noted here also that the low educational levels of the first quintile (poorest) certainly reflects on the percentage of unemployed, which exceeded all other groups at 27%. This fact also reflects on the quality of work and opportunities available to the poorest quintile as shown in tables 32 and 33.

Table 32: Relative Distribution of Working Individuals by Economic Activity and Expenditure Quintiles Activities Agriculture Industry Services Total First quintile 6.3 14.9 78.8 100 Second quintile 3.0 13.8 83.1 100 Third quintile 2.2 15.6 82.2 100 Fourth quintile 1.5 13.3 85.2 100 Fifth quintile 1.1 9.2 89.7 100 Kingdom 2.8 13.4 83.8 100 Source: Department of Statistics / Poverty Statistics Division

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The percentage of household heads of the poor quintile employed by the public sector is higher than their counterparts in the richest group at 34.1%. This indicates that the working poor prefer public work for its advantages that include job security and sustainability. On the other hand, the percentage of household heads of the richest quintile in the private sector is higher when compared with the remaining quintiles, at 72.5%.

Table 33: Relative Distribution of Working Household Heads by Household Head’s Work Sector and Expenditure Quintiles Expenditure Quintiles Public Private International Bodies Abroad Total First quintile 34.1 65.6 0.2 0.1 100 Second quintile 34.4 65.0 0.6 - 100 Third quintile 34.9 64.6 0.5 - 100 Fourth quintile 34.8 64.5 0.6 0.0 100 Fifth quintile 25.9 72.5 0.7 0.8 100 Source: Department of Statistics / Poverty Statistics Division

Table 34 shows that the relative distribution of workers by quintiles and the work sector of the household heads in the first quintile (poorest quintile), who constitute the lower percentage of workers in the public sector, 15.4%, private sector, 14.5%, and other sectors, 8.8%. While they constitute about 15% of the workers in the public sector, it is noted that the workers of the household in the second, third and fourth quintiles constitute about two thirds of the workers in this sector. It is also noted that the household heads of the poorest quintile do not tend to work outside Jordan, constituting about 4% only.

Table 34: Relative Distribution of Working Heads of Households by Quintiles and Work Sector 2008 Expenditure Quintiles Public Private International Bodies Abroad

First quintile 15.4 14.5 4.9 3.9 Second quintile 20.1 18.6 19.6 0.0 Third quintile 21.9 19.8 19.3 0.0 Fourth quintile 24.2 21.9 25.1 4.7 Fifth quintile 18.4 25.2 31.1 91.3 Total 100 100 100 100 Source: Department of Statistics / Poverty Statistics Division

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The data of the Household Expenditure and Income Survey – 2008 shows that over half of the households in the poorest quintile, or about 53% of them, live in dwellings (Dar), while the remaining live in apartments. In return, the percentage of households of the richest quintile (fifth quintile) living in apartments is higher, at 79.4%.

Table 35: Relative Distribution of Household by Type of the Housing Unit and Expenditure Quintiles Expenditure Quintiles Villa Dwelling Apartment Total % First quintile 0.0 52.6 47.4 100 Second quintile 0.0 41.3 58.7 100 Third quintile 0.0 35.9 64.0 100 Fourth quintile 0.2 29.2 70.6 100 Fifth quintile 3.2 17.4 79.4 100 Total 0.9 32.9 66.2 100 Source: Department of Statistics / Poverty Statistics Division

Table 36: Relative Distribution of Household by Type of the Housing Unit Ownership and Expenditure Quintiles Expenditure Household Rented In Return for At No Charge Total % Quintiles Owned Work First quintile 63.5 25.1 0.7 10.7 100 Second quintile 64.9 25.9 1.0 8.1 100 Third quintile 66.5 23.5 1.6 8.4 100 Fourth quintile 70.7 21.0 1.6 6.8 100 Fifth quintile 76.1 18.8 0.7 4.4 100 Kingdom 69.3 22.3 1.1 7.3 100 Source: Department of Statistics / Poverty Statistics Division

Reliance on sources of heating differs according to the expenditure quintiles. The main source of heating for the poor quintile (first quintile) is the kerosene / diesel heater, at 47.4%, while the percentage of those relying on coal or wood is 19.1%. It is noteworthy that there are no poor households that rely on central heating as a source of heating. There is also a significant percentage, 3.3%, with no source of heating. In contrast, the richest quintile (fifth quintile) relies on various sources of heating, such as the gas heater, 44.1%, the kerosene / diesel heater, 31%, and 17.2% use central heating. The table highlights the retreat in reliance on the kerosene / diesel heater at the level of the Kingdom, from 62.9% to 43.2%. This may be due to the increase in the global oil prices and the liberation of these prices by the government in early 2008.

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Table 37: Relative Distribution of Household by Main Source of Heating and Expenditure Quintiles Expenditure Year Kerosene / Gas Central Electric Coal / Other None Quintiles Diesel Heater Heater Heating Heater Wood First quintile 2006 73.1 14.7 0.1 0.3 7.6 1.2 3.0 2008 47.7 26.7 0.0 3.1 19.1 0.1 3.1 Second 2006 73.3 19.9 0.2 0.6 3.2 1.5 1.3 quintile 2008 51.7 31.7 0.2 3.3 11.5 0.3 1.3 Third quintile 2006 70.7 23.5 0.8 0.4 2.2 0.9 1.6 2008 47.0 38.0 0.2 4.1 9.4 0.3 1.0 Fourth quintile 2006 64.4 28.9 2.3 0.9 1.8 0.7 1.0 2008 45.4 41.2 0.8 5.2 5.9 0.4 1.1 Fifth quintile 2006 43.8 31.7 21.9 0.9 0.8 0.2 0.2 2008 31.0 44.1 17.2 5.5 1.6 0.2 0.4 Kingdom 2006 62.9 24.9 6.6 0.7 2.7 0.8 1.4 2008 43.2 37.6 4.9 4.4 8.3 0.3 1.2 Source: Department of Statistics / Poverty Statistics Division

This was met by the increasing use of the gas heater by families, as the gas cylinder is still subsidized in the form of a specific price by the government. This led to transforming the comsumption pattern by households towards gas in general. Table 37 above also outlines the behavior of every quintile of the expenditure quintiles in terms of the use of heating sources, and the changes resulting from the increase of prices in the oil market. The vast majority of the poorest quintile (first quintile), 73.1%, switched to useing of gas heaters instead of kerosene / diesel heaters in 2006. The users of the gas heater increased in the first quintile from 14.7% in 2006 to about 27% in 2008. Moreover, the percentage of coal and wood users increased from 7.6% in 2006 to 19.1% in 2008.

The results of the Household Expenditure and Income Survey – 2008 indicate that ownership of durable goods increases by moving from the poor to the richest quintile. The reason for this is attributed to the rising purchasing power among the richest quintile compared with others. The percentage of the poor’s ownership of durable goods (washer, fridge, telephone, satellite and mobile phone) is close to the percentages of the remaining quintiles. The reason is that these goods are essential for all households on one hand, and are easy to obtain in Jordan through the offers and facilities provided on the other. The ownership of cars varies among various quintiles. The percentage of ownership in the richest quintile reached 63.9% compared with 11.5% among the poor. As for the households that own a computer, their percentage in the richest quintile was 53.9% compared with 14.7% for the poor quintile.

Table 38 reflects the relative distribution of households by durable goods and shows that there are three types of goods relying on gas in their use. These are the gas oven, gas oven used for baking and the gas cooker. The percentage of households in the first quintile that use these goods relying on gas was 32%, 34, 5% and 69.4% respectively. It is noted that the gas cooker used in the first quintile is a gas cooker of special specifications (gas with three outlets and without an oven). Thus, it is of lower specifications, lower quality and lower prices, compared with the gas oven used by the household in the fifth quintile for example, at 85.5%, which combines a gas cooker and oven.

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Table 38: Relative Distribution of Household by Cost of Durable Goods and Expenditure Quintiles 2008 Durable Goods and Cars First Second Third Fourth Fifth Kingdom Quintile Quintile Quintile Quintile Quintile Water filter 6.9 8.9 15.5 17.4 28.3 17.0 Washing machine 94.7 96.8 98.6 97.6 98.6 97.5 Refrigerator 92.8 96.7 98.2 98.4 99.1 97.4 Freezer 1.8 2.6 5.1 7.4 22.4 9.4 Gas oven 31.9 48.8 60.5 70.3 85.5 63.1 Gas oven for baking 34.5 34.2 33.6 28.9 24.0 30.2 Gas cooker 69.4 53.3 42.3 33.7 18.0 39.8 Microwave 3.3 9.9 14.8 23.3 51.1 23.9 Electric dish washer 0.2 0.7 0.3 0.7 3.3 1.3 Electric vacuum cleaner 22.4 41.4 54.8 63.6 81.0 56.7 Television 96.3 98.8 99.2 99.2 99.6 98.8 Satellite dish and receiver 81.9 88.6 92.0 92.9 95.7 91.1 Radio or radio with player 21.9 30.4 34.2 41.4 55.5 39.0 Video, CD, DVD player 5.8 12.3 17.1 18.8 38.0 20.6 Video recorder 0.4 1.1 1.6 2.4 10.1 3.8 Computer 14.7 27.5 34.5 39.8 53.9 36.7 Internet connection 0.5 1.5 3.4 5.3 21.0 7.8 Land line phone 11.9 17.6 26.0 34.6 63.0 34.3 Mobile phone 88.6 93.8 96.1 94.3 94.6 93.8 Air conditioner 1.7 3.4 5.6 6.3 17.1 7.9 Solar heater 3.2 5.0 8.1 10.6 17.5 9.9 Sewing machine 8.4 9.0 10.6 11.1 12.8 10.7 Car 11.5 24.0 34.8 44.2 63.9 39.4 Source: Department of Statistics / Poverty Statistics Division g. Characteristics of the Poor and Non-Poor: The results indicate essential variances in the characteristics of the individuals within the poor quintile and the individuals in the remaining quintiles. The percentage of the population below 15 years of age in the poor quintile was 48% compared with 33.7% for the remaining quintiles. This indicates that the poor tend to reproduce more than the other quintiles, as they view children as a source of income.

Table 39: Relative Distribution of the Population by Poverty Quintiles and Age Group 2008 Population Group 0-4 5-14 15-24 25-59 60+ Total Poorest Group 15.6 32.4 19.2 29.1 3.7 100 Remaining Groups 12.3 21.4 23.0 36.0 7.3 100 Kingdom 12.9 23.6 22.3 34.6 6.6 100 Source: Department of Statistics / Poverty Statistics Division

A large percentage (about 58%) of individuals in the poor quintile has pre-elementary educational qualifications, compared with about 38% in the other quintiles. This indicates either the poor refrain from continuing their education or are unable to assume the responsibilities and expenses of continuing education. A comparison of the percentage of individuals with a higher than secondary education qualification between the poor and the other quintiles shows that the percentage of individuals with a higher than secondary education qualification among the poor was 6% while this percentage for the other quintiles was about 21%, which reaffirms the statements above.

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Table 40: Relative Distribution of Poor and non-Poor Individuals Population Group Pre- Elementary Apprenticeship Secondary Higher Total Elementary Education Poorest Group 57.6 23.1 0.4 12.9 6.0 100.0 Remaining Groups 38.1 19.9 0.3 20.4 21.3 100.0 Kingdom 41.3 20.4 0.3 19.2 18.8 100.0 Source: Department of Statistics / Poverty Statistics Division

A comparison of the distribution of household heads by marital status reveals that the married individuals constitute the vast majority in the poor and non-poor quintiles alike, with an increase among the poor (93.9% for the poor and 87% for the non-poor). There is also a higher percentage of widowed household heads in the non-poor quintile, at 10.3% compared with 5.3% in the poor quintile, which indicates higher age expectancy for females in this quintile.

Table 41: Relative Distribution of Poor and non-Poor Household Heads by Marital Status 2008 Population Group Single Married Divorced Widowed Total

Poorest Group 0.4 93.9 0.4 5.3 100.0 Remaining Groups 1.9 87.1 0.7 10.3 100.0 Kingdom 1.6 88.5 0.6 9.3 100.0 Source: Department of Statistics / Poverty Statistics Division

The distribution of individuals by status of employment of the poor and non-poor shows an increase in the percentage of business owners in the non-poor quintile compared with their percentage among the poor (1.2% for the poor and 5.2% for the non-poor). There is also an increase in the percentage of unemployed among the work force in the poor quintile, at 25.25%, compared with 18% among the non-poor workforce. This in turn is due to the technical and educational capacities, as noted earlier, which reflect on the ability of the other quintiles to have higher percentages in terms of business ownership. Moreover, the decreased technical and educational levels denied the poor quintile the opportunity to own business or find appropriate work opportunities in view of the labor market developments.

Table 42: Relative Distribution of Poor and non-Poor Household Heads by Work Status 2008 Population Group Single Married Divorced Widowed Total

Poorest Group 65.7 1.2 7.8 25.2 100.0 Remaining Groups 69.8 5.2 6.9 18.0 100.0 Kingdom 69.0 4.5 7.1 19.4 100.0 Source: Department of Statistics / Poverty Statistics Division

The results clearly show that about 13% of the workers who are 15 years of age or above are members of the poorest quintile of the population, while the workers from the remaining quintiles constituted the vast majority or about 87% of the total number of workers.

Table 43: Percentage of Poor and non-Poor Working Individuals 2008 Population Quintile Percentage of Workers Poorest Quintile 13.2 Remaining Quintiles 86.8 Kingdom 100 Source: Department of Statistics / Poverty Statistics Division

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Chapter Three:

Role of Government Interventions in Poverty Alleviation 23

Introduction The year 2008 saw extraordinary developments in the prices of all goods and services, especially the basic food goods and the prices of oil and its various derivatives. This led many countries, including Jordan, to apply measures to alleviate (reduce) the effects of the inflation pressures on the consumer’s budget in general, and the limited income groups in particular. The various government transfers and interventions had an effective impact in terms of setting the trends of change in the income and consumption expenditure of the Jordanian household in general and the poor household in particular. The second part of the report shed light on the process of these changes in income and expenditure. The governmental transfers and interventions received by the Jordanian households in varying and differing degrees during 2008 had a positive effect on the levels of income and consequently on the levels of expenditure. For purposes of analyzing the effect of the changes to the poverty rates in the Kingdom as a result of excluding the values of the government transfers and support offered to the relevant households to achieve the goal of social protection, the following methodology was adopted:

First: Fixing the absolute poverty line at its levels calculated for 2008.

Second: Deducting the value of transfers and various forms of government support and assistance from the registered value of the income and expenditure of the household pursuant to the Household Expenditure and Income Survey - 2008.

Third: Calculating the total number of individuals whose average expenditures fell below the absolute poverty line and their percentage to the total population, in order to obtain the percentage of poverty after excluding the value of government aid and assistance.

Fourth: Comparing the poverty rate after excluding the government aid and assistance with the poverty rate before excluding these various governmental transfers and assistance, in order to clarify and determine the effect of the government transfers and interventions that are the subject of the comparison.

3.1 Analysis of the Effect of Excluding Transfers and Government Support on Poverty Levels in the Kingdom In order to begin analyzing the effect of various Jordanian government interventions undertaken during 2008 on the poverty levels and percentages in the Kingdom, it is necessary to identify the most important measures undertaken to reduce the effect of the extraordinary inflation pressures on the limited income quintile in particular, as well as the forms of cash and in-kind support offered by the government during 2008. These measures are as follows:

23 All analysis in this chapter was conducted in current prices, with the exception of poverty rates that relied on 2006 as a base year.

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 Increasing the total value of expenditure by the National Aid Fund on its various programs during 2008 compared with 2007 by 43.2%. The value of expenditure reached JD.74.2 million as a result of the increasing number of households benefitting from aid, and increasing the level of aid to the households of five or more individuals from JD.156 to JD.180 a month.24  Increasing the salaries of employees and retirees of the civil and military sectors as of January 2008 by JD.50 a month for those whose monthly salaries are below JD.300 and JD.45 a month for those whose salary is over JD.30025, at a total cost of JD.123 million for the state treasury.  On the directives of His Majesty King Abdullah II to the government, (JD 100) were dispensed for every worker and retiree in the public sector, public institutions, the armed forces and the security bodies, in addition to the beneficiaries of the National Aid Fund to reduce the economic burdens on the citizens during Ramadan of 200826. The total cost of this measure was about JD.74.4 million during August, the month during which this Royal Decree was enacted.  One time cash assistance is offered to those public sector employees whose annual income is less than JD.1,000 and was distributed in January 2008 as a first round. The second round came in September, and the total cost of this measure was about JD.40 million.  The general tax on sales and customs tariffs on 13 basic food commodities was reduced. The tax on non-tourist restaurants was reduced to zero, and a temporary exemption was granted for retail merchants with a capital less than JD.99 thousand. The tax was also reduced from 5% to zero for eleven additional food commodities (fish, meat and animal products) on March 16, in addition to suspending customs fees on eggs and chicken, and reducing their price by 30%. The total cost of tax reductions was about JD.35 million.  Continuous subsidiary of the bread price at around 160 fils / kilo, especially in view of the rising prices of wheat in 2008. This cost the treasury about JD.175 million.  Wages and salaries were tied to inflation rates and worker productivity. The total cost to the treasury was estimated at about JD.63 billion.

For purposes of this report, and in order to study the effects on the poor in 2008 as per the data provided by the Household Expenditure and Income Survey, the effects of the first three measures were studied. The expected effects on the poverty rate in the Kingdom were analyzed on the assumption these measures were excluded, in addition to excluding the transfers of the Zakat Fund of the Ministry of Awqaf and Islamic Affairs during 2008, as shown in the following three basic scenarios:

First Scenario: This scenario assumes the exclusion of the National Aid Fund transfers only, totaling JD.74.2 million, from the household income and expenditure:

24 Central Bank of Jordan, 2008 Annual Report, previous source, p. 21, and 2008 Annual Report of the national Aid Fund. 25 Ibid, p. 25. 26 Ibid, p. 56.

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This scenario assumes that there are no transfers from the National Aid Fund, and thus the exclusion of the value of these transfers from the income and expenditure of all beneficiaries of the poor and non-poor quintiles. Then, the average expenditure by the household before the National Aid Fund transfers are compared with its average expenditure after the exclusion of the NAF transfers, according to the five population quintiles. Figure 26 shows that the effect of excluding the cash transfers of the NAF differs with different levels of expenditure by the subject five population quintiles. The quintiles most affected by this exclusion were the lower expenditure population quintiles (first quintile), where the average household expenditure decreased by 2.9% compared with their average expenditure before the transfers were excluded. However, the average household expenditure in the other population quintiles decreased by less than 0.8% for the second quintile, 0.5% for the third quintile, 0.3% for the fourth quintile, while the average expenditure of the fifth quintile was not affected.

This analysis is in agreement with the efforts of the NAF in terms of the efforts on the ground. The Fund has special criteria for dealing with the needy quintiles and identifying the characteristics of these quintiles. It is clear that the largest part of aid is allocated for the income and expenditure quintiles within the lower expenditure quintile. The average transfers for the single household in this quintile may reach about four times the average share of the household within the second and third quintiles and five and a half times the average share of the household within the fourth quintile. This indicates that the NAF focuses on the neediest households in proportion to the number of their members.

Figure 26: Percentage of Change in Average Household Expenditure as a Result of Excluding Various Social Quintiles by the Aid Fund in 2008

0 Fifth Quintile

-0.3 Fourth Quintile

-0.5 Third Quintile

-0.8 Second Quintile

-2.9 First Quintile

-3.5 -3 -2.5 -2 -1.5 -1 -0.5 0

The analysis of the impact of this scenario on the percentage of poverty in Jordan reveals an increase in this percentage after the exclusion of the NAF transfers by 13.9% in 2008, compared with 13.3% that is calculated without excluding these transfers. The reason is the reduced average expenditure of some households due to excluding the transfers offered to them to a level lower than the poverty line at the Kingdom level.

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Second Scenario: This scenario assumes the exclusion of government transfers in addition to the NAF transfers from the income and expenditure of the households. It assumes the exclusion of the government transfers totaling JD.183.3 million. These include the Hashemite Goods Packages, the onetime JD.100 granted to the civil and military employees and the beneficiaries of the NAF during Ramadan of 2008, the oil allowance, and the onetime Royal Grant totaling JD.200 given to the military personnel in September of the same year. Additionally, the transfers by the NAF during the same year were excluded from the income and expenditure of all households that received these transfers. A comparison was then made between the average values of expenditure by the single household before and after the transfers for all social quintiles. The results of this scenario indicate that all expenditure quintiles were affected as a result of excluding the above mentioned government transfers, pursuant to figure 27.

Figure 27: Percentage of Change in Average Expenditure of the Household as a Result of Excluding all Government Transfers and National Aid Fund Transfers

-1.5 Fifth Quintile

-2.9 Fourth Quintile

-3.9 Third Quintile

-4.4 Second Quintile

-7.3 First Quintile

The accumulative effects of this scenario were deeper and more varied from the effects of the first scenario on all social quintiles (since this scenario includes the first scenario in addition to the other government transfers). The percentage of decrease in the households’ expenditure within the first quintile (lower expenditure) after the exclusion of the various government transfers was 7.3%, twice the recorded percentage of decrease in the expenditure of the same quintiles in the case of the first scenario, which was 2.9%. Meanwhile, the difference at the level of the other quintiles was larger, as shown in Table 44. The reason for this is that a greater part of the government transfers included in this scenario indicates the government’s allocation of greater financial resources to improve the conditions of the middle social quintile that includes the civil and military employees and retirees through increasing the permanent and temporary monthly salaries. This falls within the efforts of the government in 2008 to address the effects of crisis of increased basic food prices and improve the standard of living for citizens in general.

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Table 44: Changes in Expenditure by Scenario Change First Second Third Fourth Fifth Quintile Quintile Quintile Quintile Quintile Expenditure change due to second -7.3 -4.4 -3.9 -2.9 -1.5 scenario (S2) % Expenditure change due to first scenario -2.9 -0.8 -0.5 -0.3 0.0 (S1) % Source: Department of Statistics / Poverty Statistics Division

On the other hand, it is noted that the effect of the second scenario on the lower expenditure population quintiles was larger than on the higher expenditure population quintiles. This means that the largest part of the government transfers and the NAF transfers combined was directed primarily at improving the living conditions of the quintiles with the least income to ensure social protection for the citizens.

A study of the effect of the second scenario on the poverty rate in the Kingdom reveals its increase to a higher percentage than the recorded percentage according to the first scenario. According to this scenario, it was 16.4% compared with the poverty rate in the Kingdom, which was 13.3% in 2008.

Third Scenario: This scenario presumes the exclusion of all forms of assistances offered by all government institutions from the income of the household and therefore from its expenditure. This includes assistance offered by the NAF and the government transfers from other parties, salary increases for the retired and military personnel totaling JD.186 million, Hashemite food Packages, and the values of cash and in-kind assistance offered by the Ministry of Awqaf and Islamic Affairs / Zakat Fund. All these values are excluded from the expenditure of the households that receive various types of this assistance. Then, the average household expenditure within the five different population quintiles before and after excluding government support was compared.

The results of this scenario show that the effect of excluding all forms of government support varies with the difference in the levels of expenditure of the subject five population quintiles. It is noted that the most affected quintiles by this scenario were the quintiles that fall within the lower expenditure population quintiles (first quintile), whose average expenditure after excluding the items on which the scenario was based decreased by 14.7% compared with their average expenditure before excluding the assistance. The average household expenditures according to the other expenditure quintiles decreased by 11%, 9.7%, 7.8% and 3.5% for the second, third, fourth and fifth quintiles respectively.

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Figure 28: Change in Average Household Expenditure for Various Quintiles for 2008 as per the Third Scenario (%)

-3.5 Fifth Quintile

-7.8 Fourth Quintile

-9.7 Third Quintile

-11 Second Quintile

-14.7 First Quintile

-16 -14 -12 -10 -8 -6 -4 -2 0

This scenario reaffirms once again the importance of the government support offered to all the Jordanian households in limiting the negative effects of the rising costs of living during 2008. All five social quintiles were affected without exception. Moreover, the most severe negative effect was on the least expenditure quintile, which is the highest recipient of government assistance and transfers regardless of types and government entity offering this assistance and transfer. This result is in line with the goals of the government intervention policy which targets the needy and deprived quintiles more than other social quintiles. It also reaffirms the fact that the social protection policy followed by the government aims, in addition to the above, to continue improving the standards of living of the middle classes of society and preventing them from falling below the poverty line. Figure 29 illustrates the above results, which point to a clear decrease in the average expenditure of the Jordanian household as a result of excluding all forms of support offered by the government to various social quintiles during 2008, compared with the income levels before excluding this support, but in varying degrees. The net effect (represented in the third scenario) of excluding all forms of government support and transfers was the decreased Jordanian average household expenditure by 8.1%.

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Figure 29: Percentage of Change in Average Jordanian Household Expenditure for 2008

-0.6 First scenario

-3.3 Second scenario

-8.1 Third scenario

-9 -8 -7 -6 -5 -4 -3 -2 -1 0

A study of the effect of the recorded decrease in the average household expenditure as a result of excluding government support in all its forms, while assuming a constant poverty line, reveals a decreased level of expenditure by some households to below the poverty line. Consequently, this led to an increase in the Kingdom-wide poverty percentage to 21.0% in 2008 compared with the actual poverty percentage (13.3%) in 2008. Table 45 and Figure 30 summarize the effect of direct government interventions according to the three scenarios or assumptions previously presented in alleviating poverty.

Table 45: Summary of the Effect of Direct Government Interventions in Reducing Poverty Rates by Scenarios Scenario Intervention Intervention’s Poverty Poverty Cash Value Percentage Percentage (million JD) before after Intervention Intervention (%) (%) First NAF assistance 74.2 13.9 13.3 Second NAF assistance 183 16.4 + assistance from other government bodies Third NAF assistance 307 21.0 + assistance from other government bodies + other government transfers, salary increase and other government interventions Source: Department of Statistics / Poverty Statistics Division

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Figure 30: Actual Percentage of Poverty for 2006 and 2008 and the Hypothetical Percentages according to the Three Scenarios for 2008

22.0

21 20.0

18.0 16.4 16.0

13.9 14.0 13.3 13 12.0

10.0 2006 2008

Actual poverty percentage First scenario Second scenario Third scenario

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Annex

Table 46: Poverty Incidence in2008 at Governorate level

poverty poverty ratio poverty poverty line 2008 Governorate ratio 2008 Population poors line 2006 (2006 2006 (2006=100) =100)

Capital 9.4 581 8.3 703 2310695 192597 Balqa 15.3 542 19.7 672 347419 68298 Zarqa 14.9 548 11.2 662 813036 91456 Madaba 10.0 542 14.9 677 134091 20027 Irbid 12.1 540 14.7 668 1088970 160474 Mafraq 23.0 527 31.9 656 290543 92764 Jerash 16.7 535 20.3 656 178321 36243 Ajloun 17.7 533 13.3 677 133234 17783 Karak 21.7 541 17.1 669 249510 42655 Tafila 19.1 539 21.1 660 82755 17424 Ma'an 12.7 536 24.2 674 108378 26186 Aqaba 15.4 539 11.8 668 130942 15494 Kingdom 13.0 556 13.3 680 5867894 781403

Table 47:poverty Incidence in 2008 at sub district level (2006=100) poverty ratio poverty ratio 2008 Subdistrict Name Population Poors 2006 (2006=100) Wadi Araba 62.5 69.3 6481 4492 Rwaished 73.7 65.0 5675 3687 Mraighah 27.1 48.4 8325 4027 Um Al-Jemal 15.0 46.5 16605 7725 Ghawr Al-mazra'a 45.4 44.1 15721 6934 Azraq 13.4 42.3 12513 5289 Diesah 44.4 41.0 4091 1677 Ghawr Assafi 52.8 40.8 23472 9570 Shoonah Janoobiyah 22.3 40.2 37514 15083 Om-Elqottain 12.7 39.6 10390 4110 Khaldiyah 36.1 39.4 36979 14569 Salheiah 42.8 38.1 18337 6977 Quairah 46.6 37.6 13888 5223 Huseiniya 10.3 37.0 10032 3712 Dair Al kahf 34.5 35.3 9078 3206 Badiah Shamaliyah Gharbiyah 28.3 33.6 28588 9608

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Qatraneh 35.6 33.2 7064 2343 Hosha 36.1 32.8 18140 5955 Borma 29.1 32.2 10698 3440 Bsaira 31.9 31.4 19943 6265 Shoneh Shamalieh 31.4 28.6 102632 29350 Sahab 14.2 28.6 61369 17523 Bal'ama 31.5 28.5 27081 7718 Irhab 16.0 27.9 21490 5994 Athroh 23.1 27.7 4436 1229 Mafraq 8.4 27.0 61235 16563 Muaqqar 16.6 26.1 24182 6316 Areedh 18.3 26.0 4082 1061 Dhlail 23.4 25.9 28671 7440 Jafr 26.6 25.7 5003 1285 Taybeh 9.0 25.7 35888 9206 Ain Albasha 17.5 25.2 139301 35136 Um Al-Rasas 26.2 24.8 7762 1925 Sama Asserhan 16.2 24.5 17225 4214 Iel 5.4 24.4 8979 2195 Dair Alla 18.0 24.4 40805 9946 Jizah 23.7 24.1 40017 9644 Petra 13.1 23.9 27499 6582 Ramtha 8.6 20.9 132080 27621 Orjan 29.7 20.8 16328 3397 Jarash 16.0 20.6 154735 31933 Hasa 13.0 19.8 10937 2171 Koorah 12.3 19.0 103339 19621 Karak 13.6 18.1 90227 16289 Ma'an 5.1 17.9 33023 5912 Bani Obeid 5.6 17.8 118933 21147 Tafiela 15.0 17.3 51876 8988 Hosban 8.7 16.5 16765 2771 Madaba 8.2 16.5 82978 13687 Faqo'e 24.7 16.0 13891 2218 Rugm al-shami 22.7 15.6 16796 2621 Kufranjah 36.9 15.2 33317 5056 Faisaliyah 9.4 15.0 6848 1025 Sabha 18.9 14.6 11420 1663 Hashemiyah 13.1 14.0 52827 7412 Deiban 11.4 13.7 12489 1713 Na'oor 4.4 13.5 46115 6225 Wastiyah 17.1 13.2 29385 3882

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Ajlun 5.9 12.1 63727 7702 Ayy 15.5 11.8 8608 1020 Amman Qasabah 12.2 11.4 604565 68714 Shobak 8.6 11.2 11082 1245 Zarqa 11.9 11.1 420114 46481 Um Elbasatien 1.4 10.7 11599 1238 Fuhais 0.0 10.3 22936 2358 Jrainah 10.4 10.1 8029 812 Maeen 16.6 10.1 6580 664 Mowjeb 44.5 9.5 6087 581 Manshiyah 1.9 9.3 8300 775 Marka 10.7 9.2 551794 50702 Mazar Shamali 12.0 9.1 51202 4667 Irbid 11.1 9.0 428727 38656 Russeifa 19.2 8.4 285973 24075 Sakhrah 16.2 8.2 19862 1628 Mlaih 14.3 8.1 13084 1065 Bani Kenanah 8.5 7.3 86636 6325 Mestabah 14.2 6.7 12888 870 Al-Ardha 12.1 6.6 8442 557 Zay 17.5 6.4 13311 857 Ira & Yarqa 0.0 6.3 8345 522 Mazar Janoobi 12.0 6.0 59930 3568 Bierain 9.2 5.9 12939 759 Salt 13.0 5.0 76398 3840 Wadi Essier 6.6 4.5 227276 10339 Quaismeh 8.0 4.1 287430 11667 Aqaba 6.5 3.9 106483 4101 Mo'ab 5.9 1.4 9499 132 Al-Jami'ah 2.0 0.7 414916 2911 Qasr 22.4 0 14962 0

Table 48:poverty pockets get out from 2006 pockets

poverty ratio poverty Subdist. Name 2008 Population poors ratio 2006 (2006=100) Um Al-Rasas 26.2 24.8 7762 1925 Orjan 29.7 20.8 16328 3397 Kufranjah 36.9 15.2 33317 5056 Mowjeb 44.5 9.5 6087 581

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Table 49: new poverty pockets 2008 (first time)

poverty ratio poverty Subdist. Name 2008 Population poors ratio 2006 (2006=100) Um Al-Jemal 15.0 46.5 16605 7725 Azraq 13.4 42.3 12513 5289 Shoonah Janoobiyah 22.3 40.2 37514 15083 Om-Elqottain 12.7 39.6 10390 4110 Huseiniya 10.3 37.0 10032 3712 Sahab 14.2 28.6 61369 17523 Irhab 16.0 27.9 21490 5994 Athroh 23.1 27.7 4436 1229 Mafraq 8.4 27.0 61235 16563 Muaqqar 16.6 26.1 24182 6316 Areedh 18.3 26.0 4082 1061 Dhlail 23.4 25.9 28671 7440 Taybeh 9.0 25.7 35888 9206 Ain Albasha 17.5 25.2 139301 35136

Table 50: continue poverty pockets between 2006 1nd 2008 (2006=100)

poverty ratio poverty Subdist. Name 2008 Population poors ratio 2006 (2006=100) Wadi Araba 62.5 69.3 6481 4492 Rwaished 73.7 65.0 5675 3687 Mraighah 27.1 48.4 8325 4027 Ghawr Al-mazra'a 45.4 44.1 15721 6934 Diesah 44.4 41.0 4091 1677 Ghawr Assafi 52.8 40.8 23472 9570 Khaldiyah 36.1 39.4 36979 14569 Salheiah 42.8 38.1 18337 6977 Quairah 46.6 37.6 13888 5223 Dair Al kahf 34.5 35.3 9078 3206 Badiah Shamaliyah Gharbiyah 28.3 33.6 28588 9608 Qatraneh 35.6 33.2 7064 2343 Hosha 36.1 32.8 18140 5955 Borma 29.1 32.2 10698 3440 Bsaira 31.9 31.4 19943 6265 Shoneh Shamalieh 31.4 28.6 102632 29350 Bal'ama 31.5 28.5 27081 7718 Jafr 26.6 25.7 5003 1285

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Table 51: poverty pockets in 2006

poverty ratio poverty Subdist. Name 2008 Population poors ratio 2006 (2006=100)

Rwaished 73.7 1 5675 3687 Wadi Araba 62.5 2 6481 4492 Ghawr Assafi 52.8 3 23472 9570 Quairah 46.6 4 13888 5223 Ghawr Al-mazra'a 45.4 5 15721 6934 Mowjeb 44.5 6 6087 581 Diesah 44.4 7 4091 1677 Salheiah 42.8 8 18337 6977 Kufranjah 36.9 9 33317 5056 Khaldiyah 36.1 10 36979 14569 Hosha 36.1 11 18140 5955 Qatraneh 35.6 12 7064 2343 Dair Al kahf 34.5 13 9078 3206 Bsaira 31.9 14 19943 6265 Bal'ama 31.5 15 27081 7718 Shoneh Shamalieh 31.4 16 102632 29350 Orjan 29.7 17 16328 3397 Borma 29.1 18 10698 3440 Badiah Shamaliyah Gharbiyah 28.3 19 28588 9608 Mraighah 27.1 20 8325 4027 Jafr 26.6 21 5003 1285 Um Al-Rasas 26.2 22 7762 1925

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